Thursday, August 8, 2013

Why trade binary options 1

Binary trading offers the following benefits:
  • Potential for dramatic short-term returns: As a market approaches expiry, the value of a binary can increase in value by several hundred percent in less than an hour.
  • Strictly limited risk: You cannot lose more than the premium you have paid.
  • Wide range of markets: We offer a wide choice binaries on forex, indices, commodities and more.
  • Continuous dealing prices: We quote a continuous price until very shortly before the underlying market closes. So you can close your position without waiting for the market settlement.
  • Go long or short: You can buy or sell any binaries we quote.
Types of binaries
All binaries settle at either 0 or 100, but there are different criteria to be satisfied for different types of binaries.

Ladders

A binary trade on whether the underlying market will finish above a stated level. For example, a 'Gold to be above 1256' Ladder will settle at 100 if the Gold finishes the day at or above 1256 and will settle at 0 if it finishes below 1256.

Targets

A binary trade on whether a market will close in a certain range. For example, a ‘FTSE® to finish down 50-60 points’ on that day’s trading target will close at 100 if this should happen. It will close at 0 if this event does not occur.
Hi-Lo
A binary trade on whether the day's high or low will be a given distance from the previous closing level.
OneTouch
A binary trade on whether the market will touch or go through the barrier level at any time before the stated expiry. For example, the ‘Daily Cash Australia 200 to touch 4710’ will settle at 100 if the 4710 level is breached before the end of the day’s trading session. It will settle at 0 if the level is not breached before the expiry time.
TUNNEL
A binary trade on whether the market will stay within two given barrier levels for the full period up to expiry. For example a ‘Wall St +/- 100’ tunnel’ will settle at 100 if Wall St stays within the +100 / -100 range for the whole trading day. But if it hits up 100 or down 100 at any point during the trading day the trade will settle at 0. Therefore when you buy a tunnel you are selling volatility and when you sell a tunnel you are buying volatility.
For details of how binary trades work, see our examples page.

Trading Spreads

We offer a range of variable spreads on binary trades.
You can trade on weekly, daily and hourly binaries.
Nearly all binary trade markets will have a spread in the range of 4-6 points. As prices move towards 50-50, the spread will be closer to 6, and as prices move towards 0 or 100, the spread will tend toward the lower end of the scale. If the price is close to 50-50 near the end of the market, the spread will often increase.
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