In the financial world, a binary option is a type of option where the payout can be made by either a fixed sum of an asset or not. The two main types of binary options are cash-or-nothing and asset-or-nothing. The cash-or-nothing binary option is paid when the fixed value of cash expires in the money, while the asset-or-nothing option is used to pay the value of the actual security.
The options are called binary options because of the inherent nature of only two different results: when a previously defined event arrives, the purchases are paid a fixed amount. Or the second possibility is that the event does not arrive, thus the option expires and is worthless – the buyer gets nothing. In addition to currency pairs, it is also possible to trade stocks, indices and commodities. For example, one can speculate on rising or falling prices for binary options.
For a long time contracts for binary options were available “above the shop table”. That is, they were passed directly from the seller to the buyer. They were generally rated as “exotic” instruments and there was not yet a regular market where they could trade with them. Since the middle of 2008, there are websites for binary options, also called platforms, which offer a simplified version of the tradable options. In 2012 it was estimated that there are now around 90 of these platforms that offer this trade with the binary options.
In general, the platforms do not charge fees when you act. They deserve the difference between the options “in money” and those who do not “run out of money”. But you should also take care. When you invest, you should be based on state-regulated, where the transactions are overseen by third parties, ensuring fair play. Since May 2012, the Cyprus Secri- turities and Exchange Commission (CySEC) has introduced new directives, all of which have to be tested within six months of the guidelines.
The platforms that are traded with Binary Options are seen by many as a kind of gaming platforms, since the outcome can often be negative, and even little or no knowledge of the current stock market has to be acted upon.
As with all the shops where money is being traded, it is to say that it is an advantage to know what to do. But even without a lot of knowledge, you can get on the various platforms and gather your experiences and ultimately learn for yourself what options are right for you.