Binary Options

What are binary options

A binary option is a type of option with a fixed payout in which you predict the outcome from two possible results. If your prediction is correct, you receive the agreed payout. If not, you lose your initial stake, and nothing more. It's called 'binary' because there can be only two outcomes – win or lose.

Advantages of binary options trading

Aside from the simplicity of its 'yes or no' proposition, binary options trading is also very flexible. It gives you the ability to trade:

Why you should trade binary options with Binary.com

Enjoy an award-winning online trading platform with trading conditions that are ideal for new and experienced traders.

• Simple and intuitive
  Enjoy a trading platform that's easy to navigate and use
• Instant access
  Open an account and start trading in minutes
• Available 24/7
  Trade when you want. Our Synthetic Indices are available even on weekends
• Patented technology
  Trade with the industry pioneer and holder of a patented pricing technology
• Security and privacy
  Trade confidently, knowing that your personal data, transactions, and funds are always secure

• All markets and conditions
  Trade currencies, indices, commodities and more in rising, falling, sideways, quiet, and volatile markets
• Short to long-term durations
  Choose timeframes from 10 seconds to 365 days

• Sharp, benchmarked prices
  Receive prices that are benchmarked against interbank rates
• Transparent risk and potential reward
  Know how much you will win or lose before you purchase the contract
• Protect your profits
  Sell your long-term contracts before expiry to protect any profits you may have made or to minimise your losses
• Two-way pricing
  Receive quotes for a trade and countertrade, so you always get unbiased, transparent rates

• Low minimum stakes
  Deposit as little as USD 5 to start trading
• Trade according to your preferred strategy
  Trade based on "gut feel" or rely on technical and fundamental analysis
• Flexible
  Choose from over one million possible trade variations at any time, and customise your trades according to your preferred strategy
• Scalable
  Earn the same proportional return on stakes of all values

How to trade binary options

Binary options trading is relatively easy. You can purchase a contract in just three steps:

1

Define your position

Choose the market, trade type, duration, barrier, and payout.

2

Get your price

Receive instant prices based on your position.

3

Make your trade

Buy the contract or re-define your position.

Step 1: Define your position

The first step is to set the parameters of your trade. There are five trade parameters you need to adjust in order to receive a price for the contract:

Choose from four available markets:

• Forex
  Major and minor pairs, plus Smart FX indices
• Indices
  All major worldwide stock indices sourced from the over-the-counter market
• Commodities
  Major commodities such as gold, silver, and oil
• Synthetic Indices
  Our proprietary synthetic indices that simulate market forces

Choose from three main trade types:

• Up/Down
  Predict if the market will rise or fall from its current level, or if it will end higher or lower than a price target
• Touch/No touch
  Predict if the market will touch or not touch a price target
• In/Out
  Predict if the market will stay between or go outside two price targets

Aside from the three main trade types above, you also get Asians and Digits trade types exclusively with our Synthetic Indices.

Set the length of your trade from 10 seconds to 365 days, whether you have a short-term or long-term view of the markets.

Set barrier(s) to define your position and trigger the payout you'll receive.

Choose the payout you wish to receive from correctly predicting this contract.

Step 2: Get your price

The price of the contract is automatically calculated by our patented pricing technology based on the parameters you've defined in Step 1. Our prices are benchmarked against the interbank options market, so you always get the most competitive prices. This means that you'll always receive fair and transparent pricing, whatever your position.

Step 3: Make your trade

When you are satisfied with the price that you receive, execute your trade immediately. With our unique platform, there's no risk of 'slippage' or gaping markets. And most importantly, there are no hidden fees. You can also sell back any long-term trades at any time to profit from favourable market conditions.

Types of trades

Binary.com offers the following trade types that will help you execute your market view or strategy:

Up/Down

There are two types of Up/Down trades:

• Rise/Fall
  Predict that the market will rise or fall from its current level
• Higher/Lower
  Predict that the market will end higher or lower than a price target

Touch/No touch

Predict that the market will touch or not touch a target any time during the contract period.

In/Out

There are two types of In/Out trades:

• Ends Between/Ends Outside
  Predict that the market stops inside or outside two price targets at the end of the time period
• Stays Between/Goes Outside
  Predict that the market stays inside or goes outside two price targets any time during the contract period

Asians

Predict that the market will end higher or lower than the average price.

Digits

Predict the last decimal digit of the spot price with Digits. There are three types of Digits trades:

• Matches/Differs
  Predict that the last digit will match or not match
• Even/Odd
  Predict that the last digit is an even number or odd number after the last tick
• Over/Under
  Predict that the last digit is higher or lower

Reset Call/Reset Put

There are two types of reset trades:

• Reset Call
  Predict that the market will end up higher than either the current level or the level at a predetermined time (reset time)
• Reset Put
  Predict that the market will end up lower than either the current level or the level at a predetermined time (reset time)

At reset time, if the spot is in the opposite direction of your prediction, the barrier is reset to that spot.

High Ticks/Low Ticks

Purchase High Tick/Low Tick contracts to predict the highest or lowest tick among the next five ticks.

Only Ups/Only Downs

Available trade types:

• Only Ups
  Win payout if consecutive ticks rise successively. Contract is lost when at least one tick falls or is equal to any of the previous ticks.
• Only Downs
  Win payout if consecutive ticks fall successively. Contract is lost when at least one tick rises or is equal to any of the previous ticks.

Please note that Asians, Digits, Reset Call/Reset Put, High Ticks/Low Ticks, and Only Ups/Only Downs are available exclusively with our Synthetic Indices.

Range of markets

Binary options allow you to trade on a wide range of underlying markets. One of the advantages of trading binary options is that you are not buying or selling an actual asset, only a contract that determines how that asset performs over a period of time. This limits your risk and makes it easy for anyone to start trading.

Available markets

Forex

Major pairs, minor pairs, and Smart FX indices.

Indices

Major worldwide stock indices sourced from the OTC market.

Commodities

All four precious metals, plus energy.

Synthetic Indices

Synthetic indices that mimic market volatility.

Forex

Trade popular major and minor currency pairs, plus Smart FX indices – weighted indices that measure the value of a currency against a basket of major currencies.

There are four types of Smart FX indices that you can trade:

• AUD Index – Measures the value of the Australian Dollar against a basket of five global currencies (USD, EUR, GBP, JPY, CAD), each weighted by 20%
• EUR Index – Measures the value of the Euro against a basket of five global currencies (USD, AUD, GBP, JPY, CAD), each weighted by 20%
• GBP Index – Measures the value of the British Pound against a basket of five global currencies (USD, EUR, AUD, JPY, CAD), each weighted by 20%
• USD Index – Measures the value of the US Dollar against a basket of five global currencies (EUR, GBP, JPY, CAD, AUD), each weighted by 20%

Indices

Enjoy exciting opportunities to trade indices with the benefit of real-time charts and pricing.

Our indices are sourced from the over-the-counter (OTC) market – sources outside of the centralised exchanges. Please note that due to their OTC nature, the prices of our indices may differ from their counterparts on centralised exchanges.

Commodities

We offer all four precious metals – gold, silver, palladium, and platinum – as well as energy in our list of commodities.

Synthetic Indices

Binary.com's Synthetic Indices are synthetic indices that mimic real-world market volatility and are available for trading 24/7. They are based on a cryptographically secure random number generator audited for fairness by an independent third party.

Synthetic Indices give you exclusive access to various trade types, such as Up/Down, Touch/No Touch, In/Out, Asians, Digits, Lookbacks, Reset Call/Reset Put, Call Spread/Put Spread, Only Ups/Only Downs, and more.

Synthetic Indices are further categorised into two classes:

• Continuous Indices – Choose from the Volatility 10 Index, Volatility 25 Index, Volatility 50 Index, Volatility 75 Index, and Volatility 100 Index. These indices correspond to simulated markets with constant volatilities of 10%, 25%, 50%, 75%, and 100% respectively
• Daily Reset Indices – Daily Reset Indices replicate markets with a bullish and bearish trend with a constant volatility. The Bull Market and Bear Market indices start at 00:00 GMT each day, replicating bullish and bearish markets respectively

Glossary

Barrier(s)

The barrier of a binary option trade is the price target you set for the underlying. You can choose trades that stay below or go above a price target, or stay between two targets.

Binary option

A binary option is a contract purchased by a trader, which pays a pre-determined amount if their prediction is correct.

Commodities

Commodities are resources that are grown or extracted from the ground, such as silver, gold and oil. On Binary.com, they are priced in US dollars.

Contract period

The contract period is the timeframe of a trade. It is also called the duration.

Derivative

A derivative is a financial instrument whose value is determined by reference to an underlying market. Derivatives are commonly traded in the inter-bank market, and binaries are one of the simplest forms of derivatives.

Duration

The duration is the length of a purchased trade (see 'contract period').

Ends Between/Ends Outside trades

An Ends Between trade pays out if the market exit price is strictly higher than the low price target AND strictly lower than the high price target. An Ends Outside binary pays out if the market exit price is EITHER strictly higher than the high price target OR strictly lower than the low price target.

Entry spot price

The entry spot price is the starting price of the trade purchased by a trader.

Expiry price

The expiry price is the price of the underlying when the contract expires.

Forex

In foreign exchange markets, traders can enter contracts based on the change in price of one currency as it relates to another currency. For example if a trader selects Rise in the EUR/USD market, they are predicting that the value of the Euro will rise in relation to the value of the US dollar.

GMT

GMT stands for Greenwich Mean Time, the official time used in the UK during winter. In summer, the UK changes to British Summer Time, which is GMT + 1 hour. All times on the Binary.com site use GMT all year round.

Higher/Lower trades

These are trades where the trader predicts if a market will finish higher or lower than a specified price target.

Indices

Stock market indices measure the value of a selection of companies in the stock market.

In/Out trades

These are trades where the trader selects a low and high barrier, and predicts if the market will stay within these barriers or go outside them (see also 'Stays Between/Goes Outside trades').

Market exit price

The market exit price is the price in effect at the end of the contract period.

No Touch trades

These are trades where the trader selects a price target, and predicts that the market will never touch the target before the expiry of the trade.

(One) Touch trades

These are trades where the trader selects a price target, and predicts that the market will touch the target before the expiry of the trade.

Payout

The payout is the amount paid to an options trader if their prediction is correct.

Pip

Pip stands for 'percentage in point' which is generally the fourth decimal place (i.e. 0.0001).

Profit

The profit is the difference between the purchase price (the stake) and the payout on a winning trade.

Synthetic Indices

The synthetic indices simulate various real market situations and provide an ideal platform for getting used to trading and testing strategies under various market conditions. These indices depend on volatility and drift, and help users to try out scenarios like - high volatility, low volatility, bullish and bearish trends.

Resale price

The resale price indicates a contract's current market price. Resale prices are on a best-efforts basis and may not be available at all times after purchase. See 'Sell option' for more details on selling contracts before expiry.

Return

The return is the money realized when the contract expires (see 'Payout').

Rise/Fall trades

These are trades where the trader predicts if a market will rise or fall at the end of a selected time period.

Sell option

It is sometimes possible to sell an option before the expiry of a trade, but only if a fair price can be determined. If this option is available, you will see a 'Sell' button inside the popup window, after clicking on the 'View' button next to your trade in the portfolio.

Spot price

This is the current price at which an underlying can be bought or sold at a particular time.

Stake

The stake is the amount that a trader must pay to enter into a trade.

Stays Between/Goes Outside trades

A Stays Between trade pays out if the market stays between (does not touch) BOTH the high barrier or the low barrier at any time during the period chosen by a trader. A Goes Outside trade pays out if the market touches EITHER the high barrier or the low barrier at any time during the period chosen by a trader.

Tick

A tick is the minimum upward or downward movement in the price of a market.

Underlying

Each binary option is a prediction on the future movement of an underlying market.