Binary Options FAQs

What are Binary Options?

Binary options (also referred to as digital options or fixed return options) are options that pay out a fixed return, depending on whether a certain condition has been fulfilled by the time the option expires. As inferred by the name ‘binary’ there are two possible outcomes, either the asset moves in the direction you chose yielding you a fixed return amount or the asset moves in the opposite direction and you either receive nothing back or some small percentage of the trade amount. In some instances there exists a third outcome, when the price of the asset at expiration is equivalent to the price at which you placed the trade, thus the option is at-the-money and you neither win or lose the trade and your full trade amount is returned.

Where can I trade Binary Options?

Binary options can be traded on a variety of web-based platforms on the net. Here at the Binary Options Weekly we recommend TradeRush, CitiTrader, and BeeOptions for your binary options trading activities.

How do I sign up and is it free?

Sign up for most leading binary options trading platforms is Free and usually only takes around 2 minutes to register. We suggest signing up with the platforms even if you are not ready to start trading at the moment. Most of the binary options trading platforms will send you educational materials and offer you generous deposit bonuses to entice you to trade if you are already registered but have not deposited any funds.

Where do I deposit money and what are my deposit options?

Deposit options vary across platforms however most of the leading binary options trading platforms take deposits via Visa, MasterCard and Diners cards, as well as by wire transfer, money bookers and several debit cards. PayPal is accepted by a few platforms.

Is there an initial minimum deposit?

Yes, most leading binary options trading platforms require an initial minimum deposit in the amount of USD100, EUR100, or GBP100.

Is there a minimum trade amount requirement?

Yes. Minimum required trade amounts vary by platform ranging anywhere between $10 and $30 per trade.

Is there a fee to withdraw funds from my account?

In general binary options trading platforms will charge a fee (~$15-$30) for wire transfer fees, Withdrawals back to your credit card are usually free but are limited by the amount you deposited via your credit card for withdrawals, thus if you make any money over the amount you deposited you’ll be required to pay a wire transfer fee for your withdrawal.

What kinds of instruments can be traded?

The most common instruments available to be traded across binary options trading platforms include: US and EUR stocks, currency pairs, Indices, and commodities.

How much can I expect to make from winning trades?

While winning payouts vary across the many binary options trading platforms, traders can expect to generate hourly returns of 60%-90% for winning trades.

Do I receive anything for losing trades?

Depends. Some binary options trading platforms offer up to 15% of the trade amount back for losing trades others offer nothing back, check the terms of each platform before entering into a trade. While a 15% return of capital seems nice for losing trades this usually comes at the expense of the winning percentage payout which will likely be lower than the winning percentage payout for binary options trading platforms that offer a lower losing percentage return.

How do I start trading the markets?

For standard High/Low, Above/Below binary options trading you simply:

  1. Choose Direction: CALL (High/Above) or PUT (Low/Below)
  2. Select how much you’d like to trade
  3. Click ‘Trade’

Assuming you choose CALL (High/Above)

  • If the asset closes above the price you purchased at expiry, you receive 60-90% (depending on the platform)
  • If the asset closes below the price you purchased at expiry, you receive 0-15% of the trade amount back (depending on the platform)

Assuming you choose PUT (Low/Below)

  • If the asset closes below the price you purchased at expiry, you receive 60-90% (depending on the platform)
  • If the asset closes above the price you purchased at expiry, you receive 0-15% of the trade amount back (depending on the platform)

What is a Call Option?

A Call option earns you a profit when the asset price at expiry time is higher than the purchase price. If the asset closes at exactly the same price, the original investment amount will be returned.

What is a Put Option?

A Put option earns you a profit when the asset price at expiry time is lower than the purchase price. If the asset closes at exactly the same price, the original investment amount will be returned.

What is ‘In-the-money’?

In-the-money refers to a successful binary options trade. For example, say you purchased a Call option and the asset finished expiration at a higher price than the purchase price. The status of your trade would be considered ‘in-the-money’ and you would receive the winning payout percentage.

What is ‘Out-of-the-money’ expiry?

Out-of-the-money refers to an unsuccessful binary options trade. For example, say you purchased a Put option and the asset finished expiration at a higher price than the purchase price. The status of your trade would be considered ‘out-of-the-money’ and you would receive the losing payout percentage.

What is the expiry time?

All binary options trading platforms offer hourly expirations. Other expiry times available across binary options trading platforms include 15 minutes, daily, weekly, and monthly.

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