Binary options for dummies

This is a discussion on Binary options for dummies within the Fixed Odds & Binary Betting forums, part of the Markets category; Binary Options are a very good way to make fast money; however, you have to know who you're dealing with, ...

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Old May 13, 2011, 3:11am   #11
 
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Re: Binary options for dummies

Binary Options are a very good way to make fast money; however, you have to know who you're dealing with, or else you can risk losing a lot of money. Banc De Binary came through for me as the 5th platform i've tried. Supprisingly enough; i found a rich asset list, great payoff's, responsive site with great customer and technical support round the clock.

But, let's face it. A fast website and nice people aren't enough to make a successful brokership. Banc De Binary have specialist brokers and analysts that eat, breathe and live Digital Options. This allows the bank to guide you on how to make the best investments with your money.

Like i mentioned earlier; i've been around the platform sites, and i've stuck with bbinary.com for almost a year now. I've enjoyed fast withdrawals, and rumor has it that BDB is even coming out with international credit cards!
I wonder what they'll think of next :-)
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Old May 13, 2011, 5:29am   #12
 
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Re: Binary options for dummies

Hi,
Im a newbie in binary option trading, but previuosly I have experience trading in forex,
I dont I can apply forex trading system and entry into binary option trading. Anyone has suggestion
how to have proper strategy to trade with binary.. thanks
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Old May 16, 2011, 10:29am   #13
 
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Re: Binary options for dummies

Last month, I got introduced to binary option trading by a friend who knew I wanted to get into trading and knew absolutely nothing about it. I checked out several sites and got into OBOption.com and was happy at how easy it was to use their practice account. A very kind, patient and knowledgeable account manager called me up and educated me about how it works and how I can maximize my earning and trading. She even gave me a 30% bonus for the initial $500 deposit I placed. Although I lost in some trades, overall I was able to gain and even referred friends to try out their platforms, because they also give you the freedom to choose where you want to invest your money.

Last edited by tar; Mar 14, 2013 at 12:24pm. Reason: link
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Old Nov 16, 2011, 11:58am   #14
 
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Re: Binary options for dummies

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Originally Posted by Iceberglettuce View Post
Binary options are good for beginners that want to get their feet wet, without worrying too much about all the jargon used in trading stocks. With binary options you either win or lose Ė there is no in between. The basic concept is that you buy a contract, either in the buy or sell mode and if the stock does as you predict you will receive money and if you were wrong, you lose it all.

Of course, this can still be quite confusing. Binary options are not available with each and every stock out there. A matter of fact, it can be hard to find the ones that offer this option.

The CBOE lists two stocks with binary options - VIX and SPX. The American Stock Exchange lists stocks with binary option as FRO and include Apple, Inc (AAPL), Cisco Systems, Inc (CSCO), Citigroup Inc (C), DIAMONDS (DIA), General Electric (GE), Goldman Sachs (GS), Google Inc CL.A (GOOG), Home Depot (HD), IBM (IBM), Intel (INTC), iShares MSCI Emerging Markets (EEM), iShares Russell 2000 Index Fund (IWM), JP Morgan Chase (JPM), Microsoft CORP (MSFT), Oil Service HOLDRS (OIH), PowerShares QQQ (QQQQ), SPDR S&P 500 (SPY), Select Sector SPDR-Energy (XLE), Select Sector SPDR-Financial (XLF) and Wachovia Corp (WB). Every stock exchange has their own binary options, so you will have to learn which ones are available with this type of option or listed as FROís.

Now, to explain the concept. Binary options give investors a wide variety of trading options in that some are short-term trades while others may be quarterly since they are based on the date of expiration. You as a binary option trader will choose the stock that you wish to buy or sell by if you believe the price will go up or down on the date of expiration. If you think the market price is going to be higher then you buy. If you believe the market price will go down then you sell. If you choose correctly, then you receive payoff on each contract you had on that stock.

Normally, the price you will receive is a fixed amount, such as $100. This means you will receive $100 for each correct contract. If you buy and spend $25 and the stock rises or are equal to the strike price on expiration, you will receive $100 for each contract. However, if you are not correct you will lose your investment all together.

Metals and energy can also be bought and sold with binary options and be watched through the New York Mercantile Exchange. With the economy the way it has been heading, many investors are buying and selling foreign currency with the hopes of making a quick buck while others are looking to natural gas or crude oil.

Example of buying a stock with binary options

Light Sweet Crude Oil (CL)
The strike price for buying (calls) is at 20000
The strike price for selling (puts) is at 8000

Looking at the market and the strike prices you can make an educated decision in which way you believe the stock will go. Letís say you buy. The last strike price for calls was at 15000 and now it is at 20000. When you buy in you are saying the price of light sweet crude oil will be at 2000 or more on the date of expiration. If you are correct, you will then receive the set amount of money, usually $100, per contract.

Example of selling a stock with binary options

If you put on light sweet crude oil, believing the strike price of 8000 will be that or less then you will receive $100 per contract if the set amount is such.

However, in both scenarios if you are incorrect and the strike price goes down with a call or up with a put then you will lose all money invested.

Example of buying or selling a stock with binary options long term

You can also call and put with stocks that do not have an expiration, except quarterly. This allows you a few more options. You can always change your mind, however, you will only receive the money you put into the stock.

If you have a contract for Gold in the amount of $80 but now you do not believe the price will be the same or more, you have the option of selling. Of course, you will sell at a loss, but you will not lose your entire $80.

However, if you leave it the same and you were correct in your speculation, you will receive the set amount of money per contract.

You need to watch the binary option price the stock is selling at. This can be a great way to make an educated decision if the stock with rise or plummet on the expiration dates.

Trade in Groups ó Donít Trade Alone
Great post, thank you for taking the time out to explain.
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Old Dec 20, 2011, 6:51pm   #15
 
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Re: Binary options for dummies

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Originally Posted by Club View Post
Great post, thank you for taking the time out to explain.
I found this new strategy which works well for me. Trading forex on a forex broker, and trading options (binary) with binary options broker. Buy EURUSD on forex and hedge the risk with binary by buying a put. if you lose the put, then you make money with long eurusd on forex. however if you make money on the put, then you close the long forex.

Last edited by tar; Mar 14, 2013 at 12:09pm. Reason: link-AV
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Old Dec 25, 2011, 4:02pm   #16
 
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Re: Binary options for dummies

I think binary options are helpful for the novice trader, and can be a really nice entry strategy into the market. It's a relatively new field, so traders should keep in mind and choose carefully. I know that Tradesmarter for example is regulated (Australia) which should be of some comfort and reduce risks as far as withdrawing funds. From what I've heard they have a pretty good reputation when it comes to customer service as well.
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Old Apr 25, 2012, 4:23pm   #17
 
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Re: Binary options for dummies

Has anybody tried Tradesmarter?! Is this site legit?! Please shed some light. =(
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Old Aug 30, 2012, 1:07pm   #18
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You will see from my previous posts I am a huge fan of Binary/ Digital Options, but only certain platforms. I do not like the up/down for max 85% model.... Its a gamble and very rarely can you get your money back.

You mentioned an option builder.... I bet you only get a max of 75 or so % return offered.

If you are hedging with a long fx position why don't you build your put option with PYXmarkets which is a very processional version of a binary platform. The risk is fixed as all binaries but the returns are multiple... They say you can get a return of up to 2000% from each trade but I have only ever seen around 900% still that beats 85%. You choose the range you believe the market will close but can also sell out early to cut a loss or take a profit.... Its awesome in comparison to many others I have used.

It incorporates the best features of all these platform such as IG, Bet on Markets and GFT but offers higher returns.

Quote:
Originally Posted by markotrader View Post
I found this new strategy which works well for me. Trading forex on a forex broker, and trading options (binary) with binary options broker. Buy EURUSD on forex and hedge the risk with binary by buying a put. if you lose the put, then you make money with long eurusd on forex. however if you make money on the put, then you close the long forex. with .

Last edited by tar; Mar 14, 2013 at 12:12pm. Reason: link-AV
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Old Aug 30, 2012, 1:09pm   #19
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Re: Binary options for dummies

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Originally Posted by jlgildo View Post
Has anybody tried Tradesmarter?! Is this site legit?! Please shed some light. =(
I'm not sure. Hopefully you will get some opinions though.
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Old Sep 4, 2012, 6:12pm   #20
 
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Re: Binary options for dummies

Hello,
For those who want to know more about binary options trading, I try to provide a guide which helps them to understand binary options trading.

Type of bets

A- Hi/Low
In this option if you believe from your market analysis that the price will close below the current price on time expiry then put your bet "Low" and "Hi" in case you believe that on expiry the price will be higher than the current price.

B- One Touch (Touch/No Touch)
In this option if you believe that the price will touch the target price before the option expiry then put your bet "Touch" and "No Touch" if you believe that the price will not touch the target level before the option expiry.

C- Boundary Option "In/Out"
In this option if you believe that the price will be between 2 levels on the option expiry then put your bet "In" otherwise put your bet "out"

Expiry Time
For each of the above options there is an expiry time, there is intra day expiry time its 30 min or 1 hour, and there is at day end expiry where the option is allowed during the day long it expires 1 hour before the close of NY session.

What to trade in binary Options
Binary Options include Forex, Commodities, Index, Stocks, Gold, Silver.

Hope this helps!
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