Helpful Tips to Make Money

Binary options are a plain and simple way to trade based on your opinion of where a market is headed over a certain period of time. They are contracts that pay out a predetermined amount or nothing at all at expiration. The payout amount for your option is determined before you place the trade.

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These options are based on an underlying security, commodity, or currency that have various strike prices to choose from as well as various expirations. Both call and put options are available for trading. If, at expiration, the price of the underlying security closes at or above the selected strike price, the buyer of a call option receives the payoff. If the underlying security closes at a price that is below the strike price on the expiration date, the buyer receives nothing.

In the case of put options, the put buyer receives the payoff per contract if the underlying security closes below the strike price at expiration, and nothing if the underlying security closes at or above the strike price at expiration.

The price of an option usually reflects the perceived probability that the underlying security price will reach or exceed (for call options) or fail to reach or exceed (for put options) the selected strike price at expiration. The cost of options will normally be quoted at a price per contract. The trader can buy multiple contracts. Buyers of options pay for the contract at the time of purchase. Binary options are easy to trade but not easy to win.