Start trading Forex ( FX) binary digital options
When an investor would like to place a forex binary option trading he would take under consideration the following factors:
- Trade time
- Spot price
- Strike price
- Forex (FX) binary option price valuation time
- Expiration time
Comparison of binary options premium pricing among binary options firms
It’s highly recommendable that the binary options trader will choose the firm he’s working with according to several parameters, one of them is the option premium collected by the binary options brokerage. Usually there are great variation in the premiums paid as this investment product is relatively new and not liquid as more mature investment products such as CFD’s and Spread Betting.
The difference between: In the Money, At the Money, and Out of the Money
While placing an option trading, the main focus of the forex trader is on the current price of the underlying asset, in our case the real-time spot price.
The spot price that also can be referred as the currency price is called at the money strike price.
The forex trader can purchase a binary option; the strike price will be one of the following:
In The Money (ITM)
As you already know, anything in the online trading reward is based on a gauge of risk and reward.
The trader has to choice a variety of strategies and risk and reward factors in order to match the best options strategy that will match his investment style and the risk level he’s willing to take.
Risk haters usually stick to in-the-money option positions while risk lovers are more attracted to out-of-the-money option positions. In case the trader purchased in-the-money option, the option will move in correlation with the underlying asset price (in our example the forex spot price). The main advantage of trading forex options in contrast to taking a fx spot position is that investor will pay only the premimum without any other risk, on the other hand the premium of in-the-money option is much higher
At The Money (ATM)
Describe when the options strike price is equal to the spot price, This will allow the investor to take a position which is really close to the market real price without paying the high premiums of In the money position.
Out the Money (OTM)
Trading out of the money options is extremely popular, the forex investor speculates on a scenario which is far from the real market price. The investor wishes for a sharp move that will cause his position will advance according to his prediction, to his strike price or hopefully will exceed his strike price and will become an in the money position.
Option Value vs. Time factor
By taking a forex option trade, the investor always see in his mind several dimensions that related to his predicted profitability and risk. The most important factors are:
1)The time factor-how much time is lest the option to expire
2)Volatility-which implicate the risk within the option position
The option is prices according to many factors which are reflected in the premium price.
The idea behind pricing options is so find cases in which an underlying asset is underpriced or overpriced because of factors that aren’t related to the market and can be used by the investor to take advantage to use this price arbitrage to make money as the market correlation is not systematic.
TradeSmarter Launches its New Binary Options Trading Platform, Bringing with it an Array of Exciting Business Offerings
Online companies can now enter the booming financial gaming world, by taking advantage of TradeSmarter’s new platform and partnership model.
London, UK (PRWEB) August 18, 2009 — Today, TradeSmarter, a leading provider of financial products for the gaming industry launches an innovative Binary Options Trading Platform. The TradeSmarter platform offers a simplified hourly-options trading experience to both the experienced and novice trader, and will enable everyone to speculate on the financial markets.
After the successful beta launch of its first financial game and recent partnership with an online Australian brand, TradeSmarter is now looking to expand into worldwide partnerships. TradeSmarter will provide a turn-key solution, which includes a fully integrated, branded and customized platform, for any online company, trying to enter the financial gaming industry.
The platform itself recently launched its first financial game, ‘Above/Below’. Based upon the selection of a ‘Call’ or ‘Put’ option on any live binary trade option, the game requires the user to simply decide whether the option will close above or below the strike price after one market hour.
“We wanted to build a binary options platform that is sophisticated yet simple and fun. In this era of economic uncertainty, why should the hugely beneficial financial markets belong to a limited few?” stated a TradeSmarter’s CEO Yoni Avital.
This exciting hourly trade option guarantees returns of between 70-75% and the novice trader is never at total risk, with a 10% loss protection across all trades. A variety of trading assets are available to play with; main currency pairs (EUR/USD, USD/JPY, EUR/GBP), important commodities (Silver, Gold, Platinum, Palladium) and popular stocks (such as Apple, Google, Yahoo, Microsoft, Cisco, Jetblue & Citibank).
Trading is currently operating on a virtual basis, to allow the most inexperienced trader the chance to speculate the financial markets freely but soon users will be able to trade and win real currency, at which time virtual currency will remain live on the platform for every trader to enjoy.
Whether a white-label or licensing partnership; TradeSmarter will handle the technology and on-going development, enabling partners to focus their efforts on acquiring new customers. The TradeSmarter platform is therefore an ideal fit for online companies who are looking to take advantage of a booming financial gaming segment at minimum cost.
TradeSmarter Holdings Ltd is a technology and software provider of binary options to the financial trading and financial gaming industries. The company was set up in 2008 by a group of professionals from the gaming, financial and internet industries who wanted to create a new, fun and accessible approach towards binary options and financial trading as a whole.
Tradesmarter’s Platform-New Bottom Bar Is Up!
As you might noticed, new improvements are being added to TS financial gaming platform on a weekly basis. We are really excited about the new deployment that just went live!, some performance issues were resolved-improving your trading experience by reducing the response time by 25%.
As we are fellow traders like you, we felt something lacking in terms of feeling the pulse of the market.. So we deployed a very cool bottom bar that show a world clock, presenting you the important data your need in a more reachable manner:
- Clock – Your local time and date
- Market Quotes-The quotes are refreshed dynamically, showing you stock quotes while your are trading forex, and forex quotes while you trade binary options.. If something is happening, you can response in a quicker manner as a click on a specific quote will take you directly to the trading area
- Financial News-All the news about the instruments traded in Tradesmarter.com are aggregated into the bottom bar and shown live, saving you the hassle of opening another browser and searching for news.
We are getting great feedback’s from you guys, we got very positive comments regarding binary options trading, we promise to pursue of creating a great platform for you, new killer features are going to be deployed very soon and many great surprises are on the way…
Stay tuned ! Goto Trade options
Tradesmarter Team
What are one hour Binary Options?
One hour option term came about as traders and investors worldwide strove for new, simplified ways to trade across the financial markets. One Hour Binary options are a cross between traditional buy-and-sell options and those of fixed returns. However, do not be overwhelmed by this new system; more and more financial traders are finding it the most simple, ‘straight up’ and enjoyable way to get the best out of online trading.
Trading Binaries- How does it work?
Binary options or digital options, can have only one of two possible outcomes. When trading binary options we only have to ask ourselves two questions. First, what is the current rate of currency we are analyzing? Second, can we expect the rate to be higher or lower in a fixed time from now? For example, imagine you are a trader who is willing to risk $100 on the idea that Euro/Dollar’s exchange rate will increase in one hour from now. If your prediction is correct and the fixed return rate is 70% you will receive $170. If incorrect and your binary option decreases below the strike price, you will lose your initial investment and receive nothing. The term ‘binary’ thus suited this all-or-nothing type of trading. You should now be starting to realise why binary options are fast becoming the simplest way to trade the markets and are yielding large profits for online traders. But here are a few more factors to help you:
Benefits of trading hourly binary options
1. Controlled Risk – The percentage reward is known from the outset, as is what the player stands to lose i.e the exact amount they placed.
2. Easier, simpler – The player only needs a sense of direction i.e. ‘Will the exchange rate increase/decrease in half an hour?’
3. “In the money” – For a profitable trade to take place there is a need for price to close in-the-money, a winning trade will receive the entire payoff, even if was ‘right’ by a single tick.
4. Protection – A safer option to take if a trader has an open position elsewhere in currency, stocks etc. Utilizing a binary option can eliminate a further loss elsewhere.
5. Punctuality – Binary contracts are being issued around the clock, allowing traders to trade on multiple time frames. There is always an expiration time arriving, which constantly yields new opportunities for binary traders.
Select Direction:
1. “Call Option” – Select call if you believe that the instrument will close above the current price
2. “Put Option” – Select put if you believe that the instrument will close below the current price
3. Select Investment amount
Example:
hourly option
Digital Option Calculation
The cash-or-nothing digital option provides a fixed payout of M when the price of the underlying instrument S ends up above (in the case of a “call”) or below (in the case of a “put”) the strike price K.
Binary option formula
This can be visualized as follows, with the height of the horizontal bar equivalent to the payoff M:
One hour Digital option
What are binary options (digital options)?
http://tradesmarter.com/2009/03/what-are-binary-options/
