As the name suggests, binary signifies two. In the trading world the binary option is a type of trading when the profit is either some fixed amount of some asset or nothing at all. For stock exchange trading the two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing option. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and Fixed Return Options (FROs) (on the American Stock Exchange) .
The binary transaction is betting against or for an outcome. For example, there maybe a binary contract that says the EUR/USD will close above 1.0824 at the end of the week. You would either sell this outcome (bet against it) or buy it (bet for it.) If you are right, then you win $100 per contract, and if you lose then you only lose only what you sold the contract for.
You’ll have a good night sleep without having to worry whether or not your position is going to get stopped out, despite the fact that price is ultimately going in the direction that you thought it was!
It is allowed to hedge with a single account with Binaries Forex Options. And because your pay out is so much higher than what you invest/risk, hedging makes perfect sense with Binary Forex Options. The risk to reward ratio is relatively low.
Remember that the binary options forex is not a red/black roulette system. The binary options trading require a justified anticipation of the movement of the price. This speculation is based on market trends, economic factors and any such information that might affect the prices. Therefore due to the speculative nature of the trading, binary options must be dealt with care.
Besides the binary dealings as mentioned should be done with attention as the system is not error or scam free. The key issue that you can do to avoid a binary choices scam is as a result of carrying out a extensive homework on the forex brokerage company that you approach on becoming a member of. Of course, the best way to do this is by way of the internet forums, discussions and forex guides.
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