Simply said, making success in trading with Binary Options is mainly based on educative speculation which direction an asset probably will move. When trading in Binary Options you don’t really buy the asset but you speculate on the movement of the asset. Only in this simply form of trading give the opportunity to make profit based on a limit budget with further obligations.

Before you can start trading, you have to register at one of the Binary Option Brokers that are available on out site. To register properly you have to fill in the registration form as complete as possible. To show how Binary Options work we have to select an asset. Assets can be currencies, stocks, indexes, commodities, etc. The number of assets are regularly updated by the Binary Option Brokers.

To make a trading example we use the NASDAQ index. Before we select an asset we have to decide what trading instrument we select for the Binary Option. A trader has to speculate on what he is thinking and predicts, if the value of an asset is going up or down when the Binary Option expires.

There are 4 important details before we start (in this case the NASDAQ):

  • Expiration time: 15 minutes
  • Price of the asset when buying: 2,164.46
  • Invested amount: $1000
  • Pay out percentage: 85%

From this moment we are able to make two decisions. To trade in a High or Low Binary Option.

  1. Low: A buying price is 2,164.46. If the Binary Option expires below this price, the option will end In The Money and you make a profit. If the Binary Option expires above this price, the option will end Out Of The Money and you make a loss.
  2. High: A buying price is 2,164.46. If the Binary Option expires above this price, the option will end In The Money and you make a profit. If the Binary Option expires below this price, the option will end Out Of The Money and you make a loss.

Different Instruments

If we use the Touch trading instrument, we select Touch if we are thinking that the asset will reach the target price before the Binary Option is expired. Or if we think that the Binary Option will not reach the strike price before the option is expired, we will use the No Touch instrument.

If we used the Boundary instrument for trading in Binary Options we should select In if we think that an asset will stay inside of the fixed boundaries before the option expires. Or Out if we think that the asset will go through the fixed boundary before the options expires.