binary option and forex trading

hello friends i would like to introduce you to a fast growing online trading business, binary option forex and online trading is an online trading where you as an individual can trade in different option. just like forex trading. we trade on different option such as oil, gold, stocks, commodity and currency which is the most easy and popular trading in binary online have become very easy even to the physically challenged persons who can trade online with your PC or MOBILE  PHONE...all you need is just to trade on currency and get a good return at month end with little investment and you are sure of making a good can also browse to know more about this binary forex online trading....                       

For example, a purchase is made of a binary cash-or-nothing call option on

XYZ Corp's stock struck at $100 with a binary payoff of $1,000. Then, if at

the future maturity date <>,

often referred to as an expiry date, the stock is trading above $100,

$1,000 is received. If the stock is trading below $100, no money is

received. Under some contracts if the stock is trading at exactly $100, the

money is returned to the purchaser..........................


Example of a binary options trade

A trader who thinks that the EUR/USD price will close at or above 1.2500 at

3:00 p.m. can buy a call option <> on

that outcome. A trader who thinks that the EUR/USD price will close at or

below 1.2500 at 3:00 p.m. can buy a put option

<> or sell a call option contract.

At 2:00 p.m. the EUR/USD price is 1.2490. The trader believes this will

increase, so he buys 10 call options for EUR/USD at or above 1.2500 at

3:00 p.m. at a cost of $40 each.

The risk involved in this trade is known. The trader’s gross profit/loss

follows the "all or nothing" principle. He can lose all the money he

invested, which in this case is $40 x 10 = $400, or receive $100 x 10 =

$1,000. If the EUR/USD price will close at or above 1.2500 at 3:00 p.m. the

trader's profit will be the payoff at expiry minus the cost of the option:

$1,000 – $400 = $600.

The trader can also choose to liquidate (buy or sell in order to close) his

position prior to expiration, at which point the option value is not

guaranteed to be $100. The larger the gap between the spot price and the

strike price, the value of the option decreases, as the option is less

likely to expire in the money <>.

In this example, at 3:00 p.m. the spot has risen to 1.2505. The option has

expired in the money and the gross payoff is $1,000. The trader's net

profit is $600

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This article was published on 28.06.2016 by Helena Gomez
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