FX options
THE DEVELOPMENT OF BINARY OPTIONS
Binary options have been available for some time but were originally considered ‘exotic’ instruments with no liquid market. To trade binary options, you needed a specialist broker.
This all changed in 2008 when the
Securities and Exchange
Commission approved the listing of binary options in the US. The American Stock Exchange then launched binary options in May 2008 followed by the Chicago Board
Options Exchange a month later. Since then, many organizations have entered the sector to provide binary options broker services and a number of trading platforms are now available.
This opening up of accessible
meant that binary options became more
and
the market trading
became a much simpler process. As a result, many more people have been attracted to this form of trading and its popularity grew at an increasingly fast pace. So far, this pace shows no sign of slowing as more and more traders begin to
recognize the attractions of trading binary options.
HOW BINARY OPTIONS ARE TRADED
Trading binary options is really a straightforward process. Once you’ve selected a broker, registered and deposited some funds, making a trade involves just a few steps. Firstly, you’ll select an asset from those that are available, which will be individual stocks, market indices, currency pairs and commodities. Each will show the asset’s current quoted price, the option’s expiration time and the percentage payout for a correct forecast. You’ll then make your forecast by choosing a call option if you think the asset’s price will be higher at the expiration time or select a put option if you expect it to fall. Enter your investment amount, which will be fixed when you confirm the trade. This will determine the payout you’ll receive if your forecast is correct. Once the option expires, you’ll receive your original investment plus the stated percentage payout if you’ve forecast correctly. If you’re incorrect, however, you’ll either receive nothing or a small percentage of your investment amount. This
depends on policy of the individual broker.
In 2008 the Securities and Exchange Commission approved the listing of binary options in the US
56 FX TRADER MAGAZINE October - December 2011
THE ASSETS THAT CAN BE TRADED Since binary
options trading the
is
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