How to Understand Binary Options?

A binary option is a contract which gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a fixed price within a specified time frame. It is a fixed return option because there are only 2 possible outcomes which are fully realized at the onset of the contract.

1. Binary option trading is when a buyer enters into a contract to purchase an underlying asset at a fixed price at a pre-determined time in the future. The owner does not buy the asset itself, rather the option to buy it. The fixed price at which the owner buys or sells at, is known as the strike price.
   
   In binary option trading, the potential gain or loss is known at the onset of the contract and it is determined by the amount invested by the owner. So, there are only two possible outcomes: or the option expires in-the-money and the owner receives a 65-71% payout; or the option expires out-of-the-money and the owner receives nothing. However, if binary option trading is carried out with anyoption™, an owner receives a 15% payback if his option expires out-of-the-money.
2. There are 3 aspects to the trade: the underlying asset, the expiry time and the direction the asset will move in.
   
   The underlying asset is the item which is being traded. This could be a range of products: currencies (e.g. USD/GBP), commodities (e.g. Oil, Gold), stocks (e.g. Microsoft, Coca Cola) or indices (e.g. Nasdaq, FTSE 100).
   
   The expiry time is the pre-determined time which defines the option’s end. The option can end at the end of the hour, day, week or month.
   
   The direction the asset will move can either be up (known as a call option) or down (known as a put option). A buyer purchases a call option, if he thinks that by the expiry time, the asset will be above the strike price. He places a put option if he believes that by the expiry time, the asset’s price will be below its strike price.
   This makes binary option trading very flexible. The buyer can control the asset, expiry time and predicted asset direction. Due to the fixed return nature of options, the buyer also knows the potential gain or loss from the trade – he must only wait so see the direction the asset will move in.
    
3. A buyer can trade binary options on an online trading platform such as anyoption™ which is a new binary option trading platform available for private and institutional investors worldwide. It is 100% web based, and does not require software download or any other previous trading experience. The interface is self explanatory and easy to use, the range of assets that options are offered on is incomparable and the speed and accuracy of settlements is flawless. The most advanced and stable technologies are used to ensure the safety and satisfaction of traders.
    
4. This means that anyone can start trading immediately. Just open an account with anyoption™, deposit money and follow the simple process:
   1.Select the currency pair which will be traded on e.g. USD/EUR, GBP/JPY.
   2.Choose the investment amount for the selected binary option. This can be anything from $50 to $3,000 (or equivalent), though multiple trades can take place simultaneously.
   3.Decide if the asset is likely to increase or decrease. If increase then select a call option, if decrease then select a put option.
   4.Choose an expiry time –end of the hour, day, week or month
    
5. All a buyer must do is then wait for the expiry level of the chosen binary option to be finalized and displayed in the trading box. If the option expires in the money then the buyer makes between 65%-71% profit. If the option expires out-of-the-money then he receives a 15% payback of the initial investment.
    
6. There are several reasons why trading in binary options is rising in popularity:
   
   1. The risk involved is totally controlled and known by the option buyer. Should the option expire out-of-the-money, he will only lose 85% of his investment amount.
   2. There must only be an incremental change in asset price for the buyer to profit - a move of only a 4th decimal point can render the option in-the-money and yield profits for the buyer
   3. A buyer does not need in-depth knowledge of the market in which he’s trading – he requires a sense of direction of an asset, since magnitude of the asset movement is not important
   4. Binary option trading is extremely flexible, with a buyer able to select the asset, expiry time and price direction to suit his needs

Forex Options & Forex Options Trading Explained

Forex Options Trading

Forex (fx) is an acronym of Foreign Exchange. Forex Trading is the act of trading currencies from different countries against each other.
Forex option trading is different from regular forex trading. When an owner is buying or selling actual currencies, this is known as forex trading or currency trading. However, in forex option trading, the owner is buying the option not the currency i.e. they are entering into a contract to buy or sell currencies at a fixed price within a specified time frame.
A forex option is a type of binary option which means that the payout is determined when the contract is created i.e. the potential gain and the potential loss from the trade is known from the offset. There are only two possible outcomes: or the option expires in-the-money and the owner receives a fixed amount of cash; or the option expires out-of-the-money and the owner receives nothing. However, if forex option trading is carried out with anyoption™, an owner receives 15% back if his option expires out-of-the-money.
In forex options the underlying asset being traded is a currency pair – hence why they are also called currency options. These could take on numerous possibilities: EUR/GBP, AUD/USD, USD/JPY, GBP/JPY and more.
Receiving a payment when trading forex options is independent of the magnitude by which the price of the currency moves. For example, an owner may buy a call option for £100, expiring at the end of the day, for a return of 70% on the currency pair USD/EUR currently at 0.7037.
If at the end of the day, the currency pair ends at 0.7041 then the option has expired in-the-money and the owner will receive £170. They receive the full 70% payout, regardless that the stock only moved 0.04 points. This demonstrates the relative simplicity of trading forex options.
Over the past 2 decades the forex option trading market has exploded, with individuals entering a previously elite industry. They understand how learning a small amount about different currencies can lead to potentially huge profits with all risks being calculable in advance.

Forex Options / Currency Options

To explain Forex Options, it’s important to explain what an option is. An option is a contract which gives the buyer (known as the owner) the right, but not the obligation, to buy or sell an underlying asset at a fixed price within a specified time frame.
An underlying asset could be currencies, stocks, commodities and indices. It is the item which is being traded. This fixed price is the price at which an asset is bought or sold at – in currency option trading it is known as the strike price.
There are two types of option strategies: Call and Put.
In a call option, the owner may buy a quantity of an underlying asset at the strike price within a specified time frame.
The buyer of a call option believes the market price of the asset will rise above the strike price. If this happens, then the option (or contract) allows the owner to buy the asset at the strike price which is lower than its current price. This means the asset can be bought below its market value and the owner can profit from the difference.
In a put option, the owner may sell a quantity of an underlying asset at the strike price within a specified time frame.
The buyer of a put option believes the market price of the asset will fall below the strike price. If this happens, then the option allows the owner to sell the asset at the strike price which is higher than its current price. This means the asset can be bought below its market value and the owner can profit from the difference.
There are several benefits of forex option trading which is why many investors favor it over other options:
the risk is limited to the amount purchased in the option an investor can pay less money to enter into a deal and the possibility of profiting is high the risk is known from the offset, since the maximum an investor can lose is the money he deposited for the trade.
However, once an option has been bought, it cannot be sold so the decision to trade is final. Also, it is difficult to predict the market so an investor must be careful and considerate when trading options.
Initially, currency trading was only accessible to wealthier customers who could afford to trade with large quantities of currencies. However, due to the introduction of online trading platforms, such as anyoption™, profiting from currency option trading, even for small investors, is possible and achievable. Online option trading also enables people to invest whilst in the comfort of their own home. They can trade from wherever they are geographically, without the need for a broker.

Forex Trading

The foreign exchange market (also known as the currency exchange market) is where currency trading takes place. It enables banks, financial institutions and individuals to buy and sell foreign currencies. What this means, is that one of the parties can buy a quantity of a one currency in exchange for buying a quantity of a different currency.
Currency values fluctuate, enabling forex trading to take place. This is when a trader pre-empts the direction that a currency will go in, to hopefully yield high returns. If a quantity of a currency is bought at a set price and its value increases, then the trader can sell the currency at a later date for the new higher price and profit from the difference. A forex trader’s goal will be to gain from foreign currency movement.
Currency trading is sensitive to economic and political factors, resulting in a forever unpredictable market. Hence the potential for capital gains can be huge, if a currency is traded wisely.
How are the rates of currencies represented?
Currency rates are represented relative to one another i.e. how much of one currency is needed to buy another.
They are quoted in pairs.
For example, USD/EUR = 0.7037. This means that it costs 0.7037 Euros to buy 1 US dollar.
The first currency, in this case the US dollar, is known as the ‘base’ and it is always written first and with a value of 1. The second number is the ‘quote’ currency and it shows the price for 1 unit of the base currency.
Forex trading becomes more interesting as the strength of currencies begin to change. In our example above, if the US dollar becomes stronger, then the quote currency rises, since it will take more Euros to buy 1 dollar, or alternatively, for each 1 US dollar, a trader will receive more Euros.
Similarly, if the US dollar weakens, then the quote currency goes down, and it costs less in Euros to buy one US dollar, or for each US dollar you will receive less Euros.
What does this mean for the average person on the street?
This could affect a person is several ways. Take the pair USD/EUR where the Euro applies to someone living in France:
A strong US dollar means that a Frenchman will find it more expensive to buy US imports since each dollar’s worth of goods will cost more Euros that it did previously. Similarly, an American travelling to France will find it ‘cheaper’, since for every dollar that they exchange, they will get more Euros in return and will therefore have more Euros to spend for what they may have received when the US dollar was weaker (i.e. when the ‘quote’ currency was lower)

Options Trading | anyoption - Online Options Trading Platform

Options Trading

Options Trading is when an owner enters into a contract to trade a particular underlying asset. They are not buying the actual asset itself, but rather they are buying an option i.e. they are entering into a contract to buy or sell assets at a fixed price within a specified time frame.
The benefit of option trading over asset trading is that there is a much greater chance of a trade being successful, then if a person bought the asset itself. Also, since options only cost a fraction of the actual price of the underlying stock, option trading allows investors to participate in the move of a high priced asset, using only a small capital outlay.
There are different types of assets available for trading options: currency pairs, indices, stocks and commodities. anyoption™ offers over 50 assets which can be traded online. Investors can choose from indices in the United States, Europe, the Americas, Asia and the Middle East; 12 different combinations of currency pairs; commodities of copper, gold, oil and silver; and stocks in top companies such as Apple, Coca Cola, Google, Microsoft and Barclays.
A trader can also select from different expiry times: the nearest hour, end of the day, week or month. This makes options trading more interesting and flexibe, which is appealing to many news traders.
A trade is successful depending on whether it expires above or below its strike price. anyoption™ offers a trader a 65%-71% payout when the option expires in-the-money, and a 15% return if the option expires out-of-the-money. An option cannot be sold before its expiry time.

Options Trading Basics

Trading
A binary option, also referred to as a digital option or a fixed return option, is an option in which payout is determined at the onset of the contract. It pays a fixed amount of cash if the option expires in-the-money, independent of the magnitude by which the price of the underlying asset moves. anyoption™ offers you a 65%-71% payout when the option expires in-the-money, and a 15% return if the option expires out-of-the-money. The option cannot be sold before its expiration.
What is an Underlying Asset?
A commodity, index, stock, currency pair or any other financial asset that constitutes the basis for creating an option.
What is a Call Option?
An option that provides the holder with a profit when the underlying asset increases in price compared with the level it was purchased at. In the event that the option expires exactly at the same price, the full original investment amount will be returned to the investor.
What is a Put Option?
An option that provides the holder with a profit when the underlying asset depreciates relative to the purchase level. In the event that the option expires at exactly the same price, the full original investment amount will be returned to the investor.
What is the investment amount?
The amount of money invested in an option.
How to invest?
To invest, you must choose between “call” or “put” options for a given underlying asset. Clicking on the call/put button will open an investment sheet in the same box, where you will be requested to enter the amount of the investment and to approve execution. The selection may be canceled by clicking on “X” at any time before approval of the transaction. Please note that the level keeps updating in the investment sheet.
What return will I get for a successful investment?
A successful investment will result in a guaranteed return indicated on the site for the underlying asset that you selected. In the event that the option expires out-of-the-money, you will get a 15% refund of your investment amount.
What return will I get in the event that the option expires out-of-the-money?
In the event that the option expires out-of-the-money, your account will be credited automatically with 15% of the original investment amount. For example, if you invested $1,000 in a Nasdaq Call option, and at the time of expiry the level was lower than that at which you made the investment - you will automatically receive a refund of $150.
What is the difference between All Or Nothing Options and anyoption™ product?
In some commercial banks, traders can price for individuals a personalised binary option, where the individual can either get certain agreed return or lose all of his/her investment. In anyoption™ the return in case of in-the-money expiry is agreed in advance (65-71%) and on top of it there is a guaranteed 15% refund in case the option expired out-of-the-money.
What is the maximum investment amount?
The maximum investment amount for a single option is 3,000 USD (or the equivalent in one of the other available currencies). However, multiple options may be purchased, one following the other, at a higher and basically unlimited accumulated amount. If you wish to purchase options for greater amounts, you will have to purchase an option at the maximum amount of 3,000 USD, and then purchase an additional option, and so on.
What are the levels displayed in the trading boxes?
Level - the quoted price for an option of an underlying asset. The level changes and is updated frequently according to different parameters that anyoption™ proprietary algorithms take into account. The levels we present in the trading boxes in our home page are those at which anyoption™ is willing to sell options, and are not the real time market levels.For more details about how expiry levels are determined click here.
What is the expiry level?
The expiry level is the level of the underlying asset at the time of expiry of the asset according to Reuters. This is the determining level if the option has expired in-the-money or out-of-the-money. A different expiry level is determined for each underlying asset. The calculation of the expiry levels is detailed here.
What is the expiry time?
The expiry time is the time and date at which an option expires.
What is the expiry time?
The expiry time is the time and date at which an option expires.
What is the difference between purchasing options in anyoption™ and buying put and/or call options in the stock market?
The options available in anyoption™ are binary options (see definition above). They are different to standard (vanilla) option chains that are offered by stock exchanges. The latter typically have longer expiry dates, significantly fluctuating yields, and can be sold before expiry. Binary options have a fixed return and are offered for different expiry points from the end of an hour to the end of a month.
What is the meaning of the colors for the levels on the trading floor?
The colors indicate the direction of trading relative to the previous trading day. Green indicates a higher level than the anyoption™ expiry level for the previous day’s trading. Red indicates a lower level than the anyoption™ expiry level for the previous day’s trading.
What happens if the expiry level of a given underlying asset is identical to the level at which the transaction was made?
In the event of expiry at an identical level to the transaction level, the amount of the investment is returned to the customer. For example, if the customer has made a 1,000 USD call investment on Nasdaq at a level of 1,620.23, with an expiry time of 11:00, and the level at the expiry time was 1,620.23, the full investment amount is returned to the customer, and the customer’s account will be credited by 1,000 USD.
What is the time zone of the expiry time?
The site’s trading hours and expiries time are shown according to your PC’s time zone.
Are the profits taxable?
anyoption™ customers are responsible for their taxation liabilities, if any, at their place of residence. See our general terms for more details.
Why can’t I invest?
All our assets are available during market trading hours. Outside market trading hours, the asset will be displayed in anyoption™ but will be marked as disabled. On rare occasions, investments are not available for certain assets owing to technical reasons. Usually these problems are quickly resolved, and you may try again shortly. Other than this, you will not be able to invest if you have insufficient funds in your account.
Where can I view the precise trading hours of each asset?
A detailed list of all our available assets, their description, expiry times, symbol and trading hours is presented in the Asset Index.
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Buy CALL option and Get 65-71% Return if the option expires above level.
Buy PUT option and Get 65-71% Return if the option expires below level.
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One Touch Option Trading: Possible 350% Return in a Week!

Starting this weekend, anyoption™, the world’s largest binary option trading platform, will be offering weekly one touch options on a large variety of financial assets, including index options, stock options, commodities options and currency options.
Every weekend, right after the markets are closed, anyoption.com will allow investors and traders to purchase short-term one touch options for the following week. The guaranteed return for these options when the ‘touch’ takes place are very high - between 200% and 350%.
For example, if the NASDAQ closes on Friday at 1,800, the anyoption™  trading system will offer two separate one touch options: one for the NASDAQ to touch 1,830 at least once in the following week, and one for the NASDAQ to touch 1,770 during the following week. For both touch options the returns will be very high, depending on several parameters.
The advantage of trading one touch options is that they do not have to be cashed in at the expiry time, but rather at any point in time during their life. They can also be used as hedging tool for stock option strategies or forex spot positions.
“After offering thousands of customers worldwide an easy and smart way to trade real-time binary options in over 50 markets, we are now responding to demand from our customers for off-hours trading. Like our binary options, the one touch trading interface will be clear and easy to use. One unit is priced at US$100 to allow entry-level traders to experience this great tool,” says an anyoption spokesman.
About anyoption™:
Anyoption™  is an all-proprietary options trading platform. Unique algorithms allow trading with customers at any time. Liabilities and exposures are managed smartly, to guarantee immediate payout of profits. anyoption™ is registered in Cyprus and owned by a group of reputable individuals with many years of experience in risk management, derivatives, forex trading, exotic options pricing, payment processing and international laws and legislations.

Binary Options Trading

A binary option is a fixed return option because there are only 2 possible outcomes which are fully realized at the onset of the contract
A binary option is a contract which gives the buyer (known as the owner) the right, but not the obligation, to buy or sell an underlying asset at a fixed price within a specified time frame.
The items being traded are known as underlying assets and they could be a range of products: currencies (e.g. USD/JPY), commodities (e.g. Oil, Gold), stocks (e.g. Microsoft, Coca Cola) or indices (e.g. Nasdaq, FTSE 100). The fixed price at which the owner buys or sells at, is known as the strike price.
When trading binary options, the buyer of the option chooses whether he thinks the underlying asset will hit the strike price by the selected expiry time – this could be at the end of the nearest hour or the end of the day, week or month.
The owner places a call option on his binary option trade if he thinks that at the expiry time the option will be higher than the current price. He places a put option if he thinks that at the expiry time the option will be lower than the current price.
In this respect binary option trading is extremely flexible. The asset, expiry time and predicted asset direction can be controlled by the owner of the investment who can select each one as he desires. The only unknown factor is if the asset will expire higher or lower that its existing price.
The returns from binary option trades are set from the onset of the contract. If an option expires in-the-money then a buyer will receive between 65-71% profit on the investment amount. If an option expires out-of-the-money then with anyoption™, the buyer will receive a 15% payback on his initial investment. The certainty of binary option trading makes it a preferred method of trading for many investors since not only is the potential gain known from the offset, but more importantly the potential loss is fixed and they will not be called upon for cover an investment which ended out-of-the-money.
This is how trading binary options would work: Investor A invests $100 on a call option on Oil, with a 70% return rate, with an end of the day expiry time. The current rate of Oil is 65.9001. If at the end of the day the price of oil closes at 65.9002 or above, then Investor A will receive $170. If it closes at 65.9000 or below, then he will receive a $15 payback. The simplicity of binary option trading makes it an attractive and desired way of investing for many investors.
The difference with trading binary options to traditional trading is that in binary option trading, a buyer is just trading on the performance of an asset – they will not actually own the asset itself. For example, in a stock option trade in Microsoft, an investor is not literally buying Microsoft shares, but rather opening a contract on whether the shares of Microsoft will increase or decrease within a specified time period.
Due their uniqueness, binary options have several advantages.
They are easier to trade because only a sense of which direction the asset will move in is needed
There is a controlled risk which is known from the onset of the contract -  the 2 possible outcomes are pre-determined and set by the buyer depending on how much he invests in the option
For a binary option trade to be profitable, the option must only move in the predicted direction – the magnitude of the move is not relevant hence it is easier to receive a payout
Binary option trading is extremely flexible, due to multiple expiry dates and times, the range of underlying assets on offer and the ability to trade online without the need for a broker
So, whether you are a investor new to the world of trading options or a old-time trader used to the traditional trading market, it is recommended to try your hand at the phenomenon that is binary option trading and see how it could work for you.