Binary Option Trading

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Binary Option Trading

Twelfth session of Forex Training

Welcome back to Forex professional training in financial markets.

In this session we will talk about binary option trading, the difference between Forex trading and binary option, and the benefits of binary option and regulated binary options.

As we discussed in the previous sessions, there are 4 different types of trade:  Spot, Future, Option and Forward.

Introducing Option

Now let’s talk about option trades; in these contracts a party can choose the symbol and time of the transaction.

The difference between this type and future trades is that in future trades, a party cannot choose the time of the trade as they have been chosen before.

However, this is not an issue in option contracts, as time of the trade can be changed at any moment by the parties. Hence why, if you remember, this type is more expensive than future contracts.

In the past there were few brokerages who offered this type of trade but over the past 2 to 3 years it’s become more and more accessible, as more brokers have started offering these services to their customers.

There are also some brokers who are specifically designed to deal with option trades.

It is important to note that in Forex, option is not gambling.

Reliable websites

Around 80 websites are operating in this business, and as mentioned earlier, some are working with option trades specifically, namely www.24option.com, www.topoption.com, www.opteck.com.

It is worth mentioning that there are number of brokerages which offer option, like FXGlory.

Binary Option Trading - Binary Option Provider - Opteck Asset and Deposit Amount - Invest and Trade

Max Leverage : 1:500
Max Leverage : 1:500
Max Leverage : 1:500

If you look at our website in the option section, you should be able to find all the information you need to know about this type of trade.

There is also some extra information about 24option, which we will look at in the future sessions.

You can open an account with us and we can help you do business directly with these websites. This is the OPTECK’s website, as you can see this is very easy to follow.

This site is 24OPTIONS, which is very reputable in this business and has the most complete platform.

You should know that all Option providers represent web based trading platforms on their websites that differ from MetaTrader platforms, thus you can avoid downloading any software from the Internet to access your trading account.

Binary Option Trading - Reliable and Trustworthy Services and Support - 24Option Trading Platform

As you can see 24option is regulated by CySEC, which is connected to Cyprus and the European Union. Here we can also see another much known website TOPOPTION, a subsidiary of a famous company, MARKETS.com.

MARKETS.com is one of the very well respected and also reliable brokers in the financial market and, as you can see, it has a CySEC license too.

Advantages of Binary Option

Now it is time to look at the advantages of Forex option.

  1. You are not dependent on Pips. This means that in a normal market, in order for a party to make a profit, they need market movements; but in option, with just a bit of change in the market trend you can make a profit.

Binary Option Trading - No Spread and Limited amount of Profit and Loss - Premium and Target Price

Max Leverage : 1:400
Max Leverage : 1:400
Max Leverage : 1:50

  1. It does not include spread, which means the asking price and the selling price are equal and you only have to pay the commission. Most traders usually wait when they are experiencing losses and sell quickly when they make profit.
  2. When you make a trade in option, it instantly registers it with no delays.
  3. There is a limit to your gains and losses here, and both are very clear to a party at the time of a trade.
  4. Since there is no PIP involved in option trades, when the market is experiencing a dramatic fluctuation, parties do not lose more than a premium invested in that contract.
  5. The ability to use what we call a Break Out. This means that when the market collapses, traders know that it will start moving up again, so they use the Break Out to gain every possible amount of profit that can be considerably higher than a loss. Also there are some tools and features that can help traders to detect lucrative spots and fluctuations such as indicators and oscillators.
  6. You are also able to use methods such as Candlesticks, Amazing or News. In Forex market traders cannot open a trade around news time in which leverage is considerably reduced by brokers and re-quote orders are presented, while this is not the case in Option markets. Thus traders can easily place orders even when key news are about to be announced.

That concludes this session, until next time and another session take care.

Linkages & Notices

Kindly visit 12th session: Introduction to Binary Options on Financial Video Tutorial section to watch video format of Binary Option Trading.

You can find Introduction to Binary Options video on PForex YouTube Channel.

PForex Educational materials in text and video formats are developed by PForex Department of Education to enhance and improve investors’ knowledge and trading skills. Due to high risks and volatile fluctuations in financial markets, traders and investors must develop their trading skills and knowledge. It is strongly recommended to apply Risk and Capital Management when trading in financial markets.

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