How to Trade Binary Options in Binary.com
By Binary Option
What are binary options
A binary option is a type of option with a fixed payout in which you predict the outcome from two possible results. If your prediction is correct, you receive the agreed payout. If not, you lose your initial stake, and nothing more. Its called binary because there can be only two outcomes – win or lose.
Aside from the simplicity of its yes or no proposition, binary options trading is also very flexible. It gives you the ability to trade:
Advantages of binary options trading
- Trade on underlying markets that include forex, stock indices, commodities, and more.
All market conditions
- Predict market movement using up/down, touch/no touch, and in/out trade types.
- Take a short-term or long-term view with trade durations from 10 seconds to 365 days.
- Earn payouts up to 50,000 USD. Losses are limited to your initial stake and nothing more.
Enjoy an award-winning online trading platform with trading conditions that are ideal for new and experienced traders.
Why you should trade binary options with Binary.com
Award-winning online trading platform
Simple and intuitive
- Enjoy a trading platform thats easy to navigate and use.
- Open an account and start trading in minutes.
- Trade when you want. Our Synthetic Indices are available even on weekends.
- Trade with the industry pioneer and holder of a patented pricing technology.
- Trade confidently, knowing that your personal data, transactions, and funds are always secure.
All conditions and durations
All markets and conditions
- Trade currencies, stock indices, commodities and more in rising, falling, sideways, quiet, and volatile markets.
- Choose timeframes from 10 seconds to 365 days.
Competitive and transparent pricing
Sharp, benchmarked prices
- Receive prices that are benchmarked against interbank rates.
- Know how much you will win or lose before you purchase the contract.
- Sell your long-term contracts before expiry to protect any profits you may have made or to minimise your losses.
- Receive quotes for a trade and countertrade, so you always get unbiased, transparent rates.
Ideal for new and experienced traders
Low minimum stakes
- Deposit as little as 5 USD to start trading.
- Trade based on "gut feel" or rely on technical and fundamental analysis.
- Choose from over one million possible trade variations at any time, and customise your trades according to your preferred strategy.
- Earn the same proportional return on stakes of all values.
How to trade binary options
Binary options trading is relatively easy. You can purchase a contract in just three steps:
1 Define your position
Choose the market, trade type, duration, barrier, and payout.
2 Get your price
Receive instant prices based on your position.
3 Make your trade
Buy the contract or re-define your position.
The first step is to set the parameters of your trade. There are five trade parameters you need to adjust in order to receive a price for the contract:
Step 1: Define your position
Choose from four available markets:
- Major and minor pairs, plus Smart FX indices
- All major worldwide stock indices sourced from the over-the-counter market
- Major commodities such as gold, silver, and oil
- Synthetic Indices
- Our proprietary synthetic indices that simulate market forces
2 Trade type
Choose from three main trade types:
- Predict if the market will rise or fall from its current level, or if it will end higher or lower than a price target.
- Predict if the market will touch or not touch a price target.
- Predict if the market will stay between or go outside two price targets.
Set the length of your trade from 10 seconds to 365 days, whether you have a short-term or long-term view of the markets.
Set barrier(s) to define your position and trigger the payout youll receive.
Choose the payout you wish to receive from correctly predicting this contract.
Step 2: Get your price
The price of the contract is automatically calculated by our patented pricing technology based on the parameters youve defined in Step 1. Our prices are benchmarked against the interbank options market, so you always get the most competitive prices. This means that youll always receive fair and transparent pricing, whatever your position.
Step 3: Make your trade
When you are satisfied with the price that you receive, execute your trade immediately. With our unique platform, theres no risk of slippage or gaping markets. And most importantly, there are no hidden fees. You can also sell back any long-term trades at any time to profit from favourable market conditions.
Types of tradesBinary.com offers the following trade types that will help you execute your market view or strategy:
There are two types of Up/Down trades:
- Predict that the market will rise or fall from its current level.
- Predict that the market will end higher or lower than a price target.
Predict that the market will touch or not touch a target any time during the contract period.
There are two types of In/Out trades:
Ends Between/Ends Outside
- Predict that the market stops inside or outside two price targets at the end of the time period.
Stays Between/Goes Outside
- Predict that the market stays inside or goes outside two price targets any time during the contract period.
Predict that the market will end higher or lower than the average price.
Predict the last decimal digit of the spot price with Digits. There are three types of Digits trades:
- Predict that the last digit will match or not match.
- Predict that the last digit is an even number or odd number after the last tick.
- Predict that the last digit is higher or lower.
Reset Call/Reset Put
There are two types of reset trades:
- Predict that the market will end up higher than either the current level or the level at a predetermined time (reset time).
- Predict that the market will end up lower than either the current level or the level at a predetermined time (reset time).
- At reset time, if the spot is in the opposite direction of your prediction, the barrier is reset to that spot.
High Ticks/Low Ticks
Purchase High Tick/Low Tick contracts to predict the highest or lowest tick among the next five ticks.
Only Ups/Only Downs
Available trade types:
- Win payout if consecutive ticks rise successively. Contract is lost when at least one tick falls or is equal to any of the previous ticks.
- Win payout if consecutive ticks fall successively. Contract is lost when at least one tick rises or is equal to any of the previous ticks.
Please note that Asians, Digits, Reset Call/Reset Put, High Ticks/Low Ticks, and Only Ups/Only Downs are available exclusively with our Synthetic Indices.
Range of marketsBinary options allow you to trade on a wide range of underlying markets. One of the advantages of trading binary options is that you are not buying or selling an actual asset, only a contract that determines how that asset performs over a period of time. This limits your risk and makes it easy for anyone to start trading.
Major pairs, minor pairs, and Smart FX indices.
Major worldwide stock indices sourced from the OTC market.
All four precious metals, plus energy.
Synthetic indices that mimic market volatility.
Trade popular major and minor currency pairs, plus Smart FX indices – weighted indices that measure the value of a currency against a basket of major currencies.
There are four types of Smart FX indices that you can trade:
- AUD Index – Measures the value of the Australian dollar against a basket of five global currencies (USD, EUR, GBP, JPY, CAD), each weighted by 20%
- EUR Index – Measures the value of the Euro against a basket of five global currencies (USD, AUD, GBP, JPY, CAD), each weighted by 20%
- GBP Index – Measures the value of the British Pound against a basket of five global currencies (USD, EUR, AUD, JPY, CAD), each weighted by 20%
- USD Index – Measures the value of the US dollar against a basket of five global currencies (EUR, GBP, JPY, CAD, AUD), each weighted by 20%
Enjoy exciting opportunities to trade stock indices with the benefit of real-time charts and pricing.
Our stock indices are sourced from the over-the-counter (OTC) market – sources outside of the centralised exchanges. Please note that due to their OTC nature, the prices of our stock indices may differ from their counterparts on centralised exchanges.
We offer all four precious metals – gold, silver, palladium, and platinum – as well as energy in our list of commodities.
Binary.coms Synthetic Indices are synthetic indices that mimic real-world market volatility and are available for trading 24/7. They are based on a cryptographically secure random number generator audited for fairness by an independent third party.
Synthetic Indices give you exclusive access to various trade types, such as Up/Down, Touch/No Touch, In/Out, Asians, Digits, Lookbacks, Reset Call/Reset Put, Call Spread/Put Spread, Only Ups/Only Downs, and more.
Synthetic Indices are further categorised into two classes:
- Continuous Indices – Choose from the Volatility 10 (1s) Index, Volatility 25 (1s) Index, Volatility 50 (1s) Index, Volatility 75 (1s) Index, Volatility 100 (1s) Index, Volatility 10 Index, Volatility 25 Index, Volatility 50 Index, Volatility 75 Index, and Volatility 100 Index. These indices correspond to simulated markets with constant volatilities of 10%, 25%, 50%, 75%, and 100% respectively.
- Daily Reset Indices – Daily Reset Indices replicate markets with a bullish and bearish trend with a constant volatility. The Bull Market and Bear Market indices start at 00:00 GMT each day, replicating bullish and bearish markets respectively.
- The barrier of a binary option trade is the price target you set for the underlying. You can choose trades that stay below or go above a price target, or stay between two targets.
- A binary option is a contract purchased by a trader, which pays a pre-determined amount if their prediction is correct.
- Commodities are resources that are grown or extracted from the ground, such as silver, gold and oil. On Binary.com, they are priced in US dollars.
- The contract period is the timeframe of a trade. It is also called the duration.
- A derivative is a financial instrument whose value is determined by reference to an underlying market. Derivatives are commonly traded in the inter-bank market, and binaries are one of the simplest forms of derivatives.
- The duration is the length of a purchased trade (see contract period).
Ends Between/Ends Outside trades
- An Ends Between trade pays out if the market exit price is strictly higher than the low price target AND strictly lower than the high price target. An Ends Outside binary pays out if the market exit price is EITHER strictly higher than the high price target OR strictly lower than the low price target.
Entry spot price
- The entry spot price is the starting price of the trade purchased by a trader.
- The expiry price is the price of the underlying when the contract expires.
- In foreign exchange markets, traders can enter contracts based on the change in price of one currency as it relates to another currency. For example if a trader selects Rise in the EUR/USD market, they are predicting that the value of the Euro will rise in relation to the value of the US dollar.
- GMT stands for Greenwich Mean Time, the official time used in the UK during winter. In summer, the UK changes to British Summer Time, which is GMT + 1 hour. All times on the Binary.com site use GMT all year round.
- These are trades where the trader predicts if a market will finish higher or lower than a specified price target.
- Stock market indices measure the value of a selection of companies in the stock market.
- These are trades where the trader selects a low and high barrier, and predicts if the market will stay within these barriers or go outside them (see also Stays Between/Goes Outside trades).
Market exit price
- The market exit price is the price in effect at the end of the contract period.
No Touch trades
- These are trades where the trader selects a price target, and predicts that the market will never touch the target before the expiry of the trade.
(One) Touch trades
- These are trades where the trader selects a price target, and predicts that the market will touch the target before the expiry of the trade.
- The payout is the amount paid to an options trader if their prediction is correct.
- Pip stands for percentage in point which is generally the fourth decimal place (i.e. 0.0001).
- The profit is the difference between the purchase price (the stake) and the payout on a winning trade.
- The synthetic indices simulate various real market situations and provide an ideal platform for getting used to trading and testing strategies under various market conditions. These indices depend on volatility and drift, and help users to try out scenarios like - high volatility, low volatility, bullish and bearish trends.
- The resale price indicates a contracts current market price. Resale prices are on a best-efforts basis and may not be available at all times after purchase. See Sell option for more details on selling contracts before expiry.
- The return is the money realized when the contract expires (see Payout).
- These are trades where the trader predicts if a market will rise or fall at the end of a selected time period.
- It is sometimes possible to sell an option before the expiry of a trade, but only if a fair price can be determined. If this option is available, you will see a Sell button inside the popup window, after clicking on the View button next to your trade in the portfolio.
- This is the current price at which an underlying can be bought or sold at a particular time.
- The stake is the amount that a trader must pay to enter into a trade.
Stays Between/Goes Outside trades
- A Stays Between trade pays out if the market stays between (does not touch) BOTH the high barrier or the low barrier at any time during the period chosen by a trader. A Goes Outside trade pays out if the market touches EITHER the high barrier or the low barrier at any time during the period chosen by a trader.
- A tick is the minimum upward or downward movement in the price of a market.
- Each binary option is a prediction on the future movement of an underlying market.
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