Showing posts with label forex. Show all posts

Wednesday, March 7, 2012

Basic Power for Binary Options Trading

It's time to enjoy binary options, and to do so you need to consider what asset you want to focus your attention on. Do you want to focus, for the binary trading process, on an asset like a stock or a FOREX? Or do you want to focus on a commodity?

Whatever you decide to do, and wherever you put your attention, you will want to educate yourself about the binary trading process.

One company, for instance, is Vodafone. When you follow their stock, you'll be able to see how they are doing and to make predictions about them. As the world's largest mobile telecommunications network company, there is a great deal of binary options news out there about them, and it allows you to become more educated and to make better predictions and better decisions.

Thursday, August 11, 2011

Some common info on what are binary options:

Binary option (From Wikipedia)

In finance, a binary option is a type of option where the payoff is either some fixed amount of some asset or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The cash-or-nothing binary option pays some fixed amount of cash if the option expires in-the-money while the asset-or-nothing pays the value of the underlying security. Thus, the options are binary in nature because there are only two possible outcomes. 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). Binary options are usually European-styleoptions.
For example, a purchase is made of a binary cash-or-nothing call option on XYZ Corp's stock struck at $100 with a binary payoff of $1000. Then, if at the future maturity date, the stock is trading at or above $100, $1000 is received. If its stock is trading below $100, nothing is received.
In the popular Black-Scholes model, the value of a digital option can be expressed in terms of the cumulative normal distribution function.
Click here to read the full Wikipedia article on Binary Options

A binary option is a fixed return option because there are only 2 possible outcomes which are fully realized at the onset of the contract
A binary option is a contract which gives the buyer (known as the owner) the right, but not the obligation, to buy an underlying asset at a fixed price within a specified time frame.
The items being traded are known as underlying assets and they could be a range of products: currencies (e.g. USD/JPY), commodities (e.g. Oil, Gold), stocks (e.g. Microsoft, Coca Cola) or indices (e.g. Nasdaq, FTSE 100). The fixed price at which the owner buys or sells at, is known as the strike price.
When trading binary options, the buyer of the option chooses whether he thinks the underlying asset will hit the strike price by the selected expiry time – this could be at the end of the nearest hour or the end of the day, week or month.
The owner places a call option on his binary option trade if he thinks that at the expiry time the option will be higher than the current price. He places a put option if he thinks that at the expiry time the option will be lower than the current price.

Want to try and trade binary options on your own, visit http://optionsclick.com

Thank you to this source for the info on Binary Options

Monday, August 1, 2011

Casino vs binary trading

Are binary options like gambling?

I have heard several times from people that when you are buying and selling Binary Options, your are basically gambling. While this may be the case for some people who have addiction issues, they are both quite different.

Casino games are based on luck and binary trading is based on real market conditions. This is not to say that casino's don't also involve skill or that binary trading doesn't experience luck, but the basis for the trades and exchanges of the two are very different.

The thing is that casino games are designed for users to win in order to keep them entertained and binary trading are based on which ever direction the market swings, So not sure which one is better.

Got this article from this source

Monday, July 25, 2011

The Black Scholes smiling graph.

As you are probably familiar with, the Black-Scholes model is the basis for Binary Trading, a new form of derivative investment that enables you to make money based on your accurate prediction of how the market will perform.

$dV=\left(\mu S \frac{\partial V}{\partial S}+\frac{\partial V}{\partial t}+\frac{1}{2}\sigma^{2}S^{2}\frac{\partial^{2} V}{\partial S^{2}}\right)dt+\sigma S \frac{\partial V}{\partial S}\,dW.$

This means that you can make good money by accurately predicting that a stock or other investment will go down in price, will remain the same, or will reach or drop to a certain level. While in the past, stocks would only be of use to an investor if they performed well (or in the example of a short sale, performed poorly) - but the Black Scholes model allows for "Binary Trading" meaning that you can hedge the market based on all-or-nothing positions, meaning you make 85% (or so) profit if you are right and loose 100% if you are wrong.

$\Delta S = \mu S \,\Delta t+\sigma S\,\Delta W\,$

$\Delta V=\left(\mu S \frac{\partial V}{\partial S}+\frac{\partial V}{\partial t}+\frac{1}{2}\sigma^{2}S^{2}\frac{\partial^{2} V}{\partial S^{2}}\right)\Delta t+\sigma S \frac{\partial V}{\partial S}\,\Delta W.$

With the way the market has behaved in the recent years, it became critical for investors to be able to make money using their knowledge of the market, without having to wait YEARS for the bull market to return.

Basically, if you can look at a graph and predict where it will go next, then binary options trading is right for you.