Binary Options Terms And Conditions

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WHY BINARY OPTIONS

ADVANTAGES OF BINARY OPTIONS TRADING

Exceptionally High Payouts. One of the most attractive things about Binary Options trading is a possibility to make up to 88% of the invested amount in a matter of days, minutes and even seconds if option expires in the money. Such high returns by far surpass gains of traditional stock market trading. For example, if you have reasons to believe that Facebook shares will grow in their value you may purchase them on the market and expect to gain a few points by the end of the month. But the same amount invested in Facebook shares on a binary platform can bring you in average 77% profit once the options expires. And as mentioned earlier expiry times range from 60 seconds to several days and can be chosen by the trader according to his preferences.

Controlled risks. Any time you are ready to purchase an option you need to determine an amount that you would like to invest. It is very important to understand that you do not have to actually buy or sell anything on the market, all you have to do is to predict the direction in which the asset price will go in a specific time frame. If your prognosis is correct the option expires in the money and you make profit, if your prediction is wrong you may lose up to 100% of the invested amount. But you will never lose more than you have invested.

Short term trading. When trading Binary Options you will be offered a variety of expiry times to choose from according to your preferences. It is a huge advantage for those traders who make their predictions on news releases or major economic events when right timing is crucial. Expiry times such as “the end of an hour” or “the end of the month” are particular popular amongst traders as they allow to react fast on the changing market conditions and make right investments. Some traders prefer 60-second expiries which are associated with higher risks but provide excellent returns in the shortest time possible.

Low investment amounts. If you are a novice trader you may start trading with the investment amount as low as 5 USD. Just think about it. What can you buy for 5 Euro nowadays? One hamburger? Yes. Or you may invest your 5 euro in a short term option and turn it into 9 Euro in just 60 seconds! And you do not have to worry about such things as initial investment capital, commissions, brokers, etc. And the last but not the least. Trading small amounts helps beginner traders gain confidence, learn trading techniques and improve trading skills without psychological pressure and fear of loss.

Online trading. Binary Options are traded on the online platforms and there is no need to download any software on your computer. That means that trading is available at any place where you have a computer and internet access. You just need to make sure to have good internet connection and distraction-free environment. A trade can be placed within a matter of seconds just by pressing several buttons.

Education. Binary options trading is becoming increasingly popular and there are plenty of educational resources in the Internet such as e-books, written guides, video tutorials, webinars, forums, etc. where you may find useful information. Once you become Falcon Finance trader you will be assigned a personal account manager who will guide you through the platform setting and help you with your trading. You are always welcome to contact us via email, live chat, by phone or request a call back and ask for assistance.

DISADVANTAGES OF BINARY OPTIONS TRADING

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Having said so much about advantages of Binary Options Trading we have to clarify that as any other kind of speculation on financial markets Binary trading is associated with the risk of losing your investment. But the good news is that you will never lose more than you have invested in one trade and here you have total control of how much you want to trade plus there are always ways to minimize the risks. And if you put enough time and efforts to learn the right trading strategies and techniques you will have a much better chance to close every trading day with the profit.

Terms and Conditions

It is important that you understand that we cannot be held responsible for any website that we may link to nor do we give out any guarantees about and such site in regards to the services they offer, they are simply to be used for information purposes only.

Should you be looking to start trading in any type of Binary Options then you need to fully understand the risks involved and once again we cannot be help responsible for any losses you may incur when trading in options of any type.

You should also check to see that any binary option broker or site is fully licensed and regulated before you sign up to that site and also ensure you know the risks involved, as when dealing binary options you should only ever trade with money that you can afford to lose.

You can contact us if you so desire and the contact us section of our web site is where you should head to find all of the different ways you can get in touch with us.

What Constitutes a Binary Options Contract?

A binary option trade is actually a contract. Contracts have certain features, as well as, terms and conditions which govern them. A binary options contract will therefore have certain features and specifications.

So what are those features and specifications that are common to binary options trades?

Expiry date

All binary options have a date or time that they expire. At this time, the value of the asset on expiry (expiry value) is assessed against the value of the asset when the trade was made (entry price). If a directional binary option (Up or Down) was the trade that was made, the outcome of the trade based on what the expiry value is versus the entry price will determine if the trade is settled as a profit or loss.

Expiry value

Also known as the settlement value, this is the value of the option contract when the trade expires. The settlement value determination varies on US and European binary options platforms. On US platforms, settlement value is either 0 (losing trades) or 100 (winning trades). On European platforms, settlement value is the price at which the option ends, with payment being made if the settlement value is higher than market price (CALL trade) or lowr than market price (PUT trade).

Strike price

The strike price is the target price used in determining the outcome of the trade. The strike price is most relevant in the Touch trades (Touch/No Touch or One Touch), the Ladder trades and the Tunnel trades. By comparing the expiry value to the strike price, the trade is shown to either be in the money or out of the money. Some trades have one strike price (Touch) while others have multiple strike prices (Ladder).

Underlying Asset

Every binary options contract is traded on a financial asset. This is the particular market, exchange, commodity, currency or stock that is being traded. It is the volatility of the underlying asset that provides the basis for trades. The assets are grouped into four classes:

  • Stocks
  • Stock Indices
  • Currencies
  • Commodities

Underlying Market Price

This is the real-time market price of the asset traded in the underlying contract. For most trades, the market price is used as the benchmark price for the trade (strike price). Some online platform allow traders to choose a different price as strike price (e.g. in the High/Low trade on BetonMarkets).

Contract

This is the basic unit of an options trade. In conventional options, a contract is made up of 100 units of the asset, but in binary options, whatever the trader has chosen as investment amount will serve as the contract value. For NADEX, one lot of the asset represents a contract.

The bid price is the premium price that a trader will pay to the dealer for opening an option to sell a contract, or to close a buy order. This feature is used in NADEX and on AnyOption to trade the Binary 0-100 contract.

This is a term used to define a bet strategy which is based on an expectation that the price of the underlying asset will drop. A trader will use a PUT on an open sell order.

This is the premium price that a trader will pay for buying a position from the dealer. This is equivalent to placing a CALL trade on a position anticipating an increase in the price of the underlying market. It is also the price paid by a trader who has an open position to sell and wants to close it out.

Spread

This is the difference between the bid price and ask price. It is the broker’s compensation. In any market, an increase in trade volume or increase in liquidity will tend to cause the spread to narrow. The reverse is also the case: little volume and liquidity will cause spreads to widen. In NADEX binary options spreads are interpreted in the context of the total return.

Commission Fee

This is a service charge that the trader pays on each transaction in the market. This is usually a fixed fee as opposed to the spread which is variable. NADEX charges $1 per transaction while Cantor Exchange charges $0.9 per fill on a price you make and $0.9 per in-the-money result. Different firms charge different commissions. Online binary options brokers do not charge separate commissions. The charges are billed into the trade.

Conclusion

These terms explained above are the key features of binary options contracts, and they will be encountered whether the trader operates on NADEX or on one of the regulated and uregulated online binary options platforms. As a trader it is your responsibility to understand what these terms mean in practice. Most brokers should provide this information in their help section together with additional information on how to trade on their platform.

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Options Broker 2020!
    Great Choice For Beginners!
    Free Trading Education!
    Free Demo Account 1000$!
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  • BINOMO
    BINOMO

    Only For Experienced Traders!

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