What Are Binary Options?

What Are Binary Options?

Binary options are classed as exotic options, yet binaries are very simple to use and understand functionally. The most common binary option is a “high-low” option. Providing access to stocks, indices, commodities and foreign exchange, a high-low binary option is also called a fixed-return option. This is because the option has an expiry date/time and also what is called a strike price. If a trader wagers correctly on the market’s direction and the price at the time of expiry is on the correct side of the strike price, the trader is paid a fixed return between 67% – 82% regardless of how much the instrument moved. A trader who wagers incorrectly on the market’s direction loses her/his investment.

If a trader believes the market is rising, she/he would purchase a “call.” If the trader believes the market is falling, she/he would buy a “put.” For a call to make money, the price must be above the strike price at the expiry time. For a put to make money, the price must be below the strike price at the expiry time. The strike price, expiry, payout and risk are all disclosed at the trade’s outset. For most high-low binary options outside the U.S., the strike price is the current price or rate of the underlying financial product, such as the S&P 500 index, EUR/USD currency pair or a particular stock. Therefore, the trader is wagering whether the future price at expiry will be higher or lower than the current price.

High-Low Binary Option Example

Assume your analysis indicates that Gold is going to rally for the rest of the afternoon, although you’re not sure by how much. You decide to buy a (binary) call option on Gold Index. Suppose the Gold index is currently at 1,270, so by buying a call option you’re wagering the price at expiry will be above 1,270. Since binary options are available on all sorts of time frames – from minutes to months away – you choose an expiry time (or date) that aligns with your analysis. You choose an option with a 1,270 strike price that expires 30 minutes from now. The option pays you 70% if the Gold Index is above 1,270 at expiry (30 minutes from now); if the Gold index is below 1,270 in 30 minutes, you’ll lose your investment.

You can invest almost any amount, although this will vary according to your broker. Often there is a minimum trade value say $10 and a maximum such as $10,000 (check with the broker for specific investment amounts).

In this case, assume the last quote on Gold before expiry was 1,270. Therefore, you make a $70 profit (or 70% of $100) and maintain your original $100 investment. Had the price finished below 1,270 you would lose your $100 investment. If the price had expired exactly on the strike price, the trade is a draw and therefore the trader receives back their original stake. The broker transfers profits and losses into and out of the trader’s account automatically.

To Help You Get Started you need professional help and it is vital you choose a reliable Binary Options Trading Signals Service.

On numerous occasions in the past, we have expressed our skepticism when it comes to trading signals services in general. There aren’t many that work.

However, every once in a while there exist services that catches our attention and we believe merits our mention so that all existing or aspiring binary options traders become aware of a particular service and be able to discern if it is suitable for them to use it or not.

One such service, which appears to be increasingly gaining in popularity amongst traders, is the Binary Options Trading Signals service or BOTS for short.

Franco Binary Options (BOTS)

What differentiates this service from most others out there and what actually makes it unique is the fact that rather than receiving short instructions via email or SMS, the signals here come through your browser, during a live web session. It is literally like having a professional trader sitting next to you at your desk. Access is both through a pc and a mobile phone, provided it carries the necessary technology, these daily sessions put every trader in a virtual trading room, looking over the shoulder of a real professional trader, as he places his bets and being able to copy what he does.

Delivered via a high quality live stream, including full audio, this interactive session entails multiple signals relating to a wide range of expiry times and binary options tradable assets, across all the assets categories. Moreover, since it is interactive, it enables the subscribers to interact with the professional trader, Franco, in real time being able to pose all their questions and request his assistance in placing their bets or explaining any query and overcoming any difficulty they may have. Naturally, this means that the customer support service of this particular signals provider is unparalleled since it happens then and there on the spot. In addition you have live support outside of trading hours over 30, 60 or 90 days from Anthony Stone the creator of www.reversetrade.org   Anthony has over 20 years experience trading and is dedicated to helping you succeed (skype-anthonystone007)

Another unique and appealing feature of this particular signals service is the fact that it is also a learning experience for traders. Watching a professional trading on a daily basis and being able to ask him what you want while he is at it, is much like a tailor-made training session for each trader, who in time learns to incorporate the various strategies he/she is witnessing unfold before their eyes and then in turn becomes able to adopt and implement them independently.

The final advantage we want to mention on this service is the consistently good performance it records in terms of payout, since the average trader claims an 87% payout per week. Since January Franco’s trading record is 89 wins and 12 losses and 87% win rate. Calculated and benchmarked on a weekly rather than on a per trade basis, the success rate of this service is realistic and usually reliable, far from the exaggerations and unfounded claims of other signals service providers.

Having briefly elaborated on its merits let us now turn the light on the drawbacks of this particular service. In order to be able to implement the trade signals provided you have to be able to sit and watch the live streaming video. Since this is broadcast for two hours every day between 9:30 and 11:30 AM EST, you should be available, irrespective of the time zone you are in, to be sitting in front of your pc or with your smartphone in hand and also have access to your trading account in order to be able to place trades at the same time as Franco does. At least a 15” screen is recommended however a 19” screen is better so you can see the signals and arrows clearly.

 

Therefore, if you are an occasional trader then this the BOTS service is probably not suited to you as it only works if you can spare those two hours every day and dedicate them to placing your trades and learning the strategies being implemented.

Franco’s Signals Service (BOTS)  for a limited period only offers Escape Artist clients a free two-week trial.  After the trial period, If you want to use it you have to pay. Which conveniently leads us to the price of the service. We have left this towards the end, because we didn’t want to immediately put you off. The truth of the matter is that BOTS is significantly more expensive when compared to other binary options trading signals providers, since the subscription fee for two weeks is as high as 97 USD.

However, we do not feel that the higher subscription rate should immediately put you off, since if you take a closer look this service has a higher value for money than other services Provided you are serious about your trading and you have the time and money required to invest in BOTS, then it is almost certain that your investment will yield results and profits. Actually, the enhanced reliability of the signals given out and the innovative method through which they are delivered a very strong assets and they do offset the increased cost associated with the service, especially if you are careful to execute the proposed trades accurately and timely.

As always, choosing a signals service is a very personalized decision for each individual trader and not all services are equally suited for all traders. If BOTS looks like your cup of tea, then it is perhaps worth trying it out for a couple of months and judge for yourselves whether it is actually enhancing your trading experience and helping you become a more successful trader. With the free one week trial there’s no risk at all.

To access you free two week trial worth $97 contact Anthony Stone, Reverse Trade’s CEO on skype at anthonystone007

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