Do you know what is forex trading? It is the simultaneous buying of one currency and selling of another,
for example, buying Euros and selling U.S. dollars. Retail trading of foreign currencies takes place on an online trading platform
provided by the forex broker. This has become popular over the years in part because the retail trader
with only a small amount of risk capital had no alternative. But now there is an alternative: forex binary options.
Forex binary options are a novel type of investment vehicle that are rapidly becoming
a favorite among beginning investors because they have limited risk and are simple to understand.
Forex binary options typically expire in an hour, giving you the opportunity to earn a high return over a very short time period.
What Are Forex Binary Options?
A forex binary option, also referred to as a forex digital option, has only two possible payouts upon expiration
each of which is known and fixed in advance. Upon buying a forex binary option, you will receive one
of these two payouts depending upon whether the forex exchange rate meets a specified condition by the time the
option expires. The higher payout is received if the forex binary option expires
in the money while the lower payout (which may be zero in some cases) is received if the forex binary option
expires out of the money.
Forex binary option trading has several unique advantages. The maximum payout is received even if prices settle just a little in the trader's
favor. When trading forex binary options, there is no margin required and no risk of losing more than the amount
initially invested. Forex binary options cash settle at expiration so there is no need to manually close a position.
Finally, a customer can invest in a forex binary option for as little as U.S.$50 allowing the beginner to trade
with the thrill of actual money while risking very little.
How Do Forex Binary Options Work?
The most popular type is the above/below or high/low forex binary option and trading is fairly straight forward:
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If you feel that the forex exchange rate will rise, then invest in a forex binary call option.
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If you feel that the forex exchange rate will fall, then invest in a forex binary put option.
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If you choose correctly so that at option expiration, the forex exchange rate is above (below) the price at which you bought the forex
binary call (put) option, then the option will finish in the money and you will receive the maximum payout. If you´re wrong, then
you´ll receive the lesser payout which could be zero.
For example, a EUR/USD forex binary option that has percent payout of 81/0 means that, with an initial investment of U.S.$100, the customer will receive
$181 if the forex binary option expires in-the-money and $0 if the forex binary option expires out-of-the-money.
In the latter case, the customer loses the initial investment of $100 but that is the most that is lost regardless of
market activity.
How Are Forex Binary Options Traded?
Retail forex binary options are traded live on an online (web-based) electronic platform. Forex prices and charts are displayed in real time
allowing the trader to see the price action on a tick-by-tick basis. Purchasing a forex binary call or put option is done with the simple
click of a mouse. The trading platform displays a settlement price at the option's expiration and income (if any) from expiring
options is deposited automatically into the trader's account.
When trading forex binary options, you should make sure that the platform is registered and regulated. To our knowledge, TradeSmarter has
the only regulated platform on the market. You will receive personalized access codes to this platform when you request our
proprietary Binary Options Trading Starter's Pack.
YOUR NEXT STEP
In order to trade forex binary options, you first need to understand the forex market.
This free online forex tutorial will help.
Just sit back and receive an hour's worth of excellent and extensive forex content that starts with the basics.
Then, request our proprietary Binary Options Trading Starter's Pack.
You´ll receive binary options trade videos, guides and proprietary research papers along with access codes to the binary options
trading platform where you can watch forex binary options live.
Trading forex binary options should not be done impulsively. Rather, it must follow the rules of a
well-defined trading system. A trading system specifies when to buy a forex binary option, whether call or put,
and how much to risk or invest. A trading system must be appropriate for you.
Every trader has their own tolerance level for risk and amount of available risk capital and the trading
system needs to be consistent with these parameters. For more information on trading systems, request our free
brochure, How to Invest.
While this web site was designed to be accessible to all, especially the beginner, that is not to say that
trading forex binary options is appropriate for everyone. As with any type of investment, it should be carefully considered along with
your personal tolerance for risk and available risk capital. This web site will help you make an informed decision.
* Payout may be higher or lower depending upon the instrument being traded. As well, the maximum payout may decrease
as a binary option approaches the end of trading.