BeginningTrader.com
Binary Options
Binary Options Trading
A binary option is an especially short term, high yield investment. The duration of a binary option is less than a day, and sometimes less than an hour.
Below is a comparison of Binary options and regular American options
Binary Options
- Expire hourly
- Have a fixed payout
- Payout whether "in the money" or not
- No secondary market
- Measured in dollars not shares
- Contracts do not grant "right to buy" underlying security
- Only the direction of price matters
- Risk exposure is fixed
- No collateral
Regular Options
- Expire 3rd Friday of Month
- Can be executed anytime prior to expiration
- Have a variable payout
- Payout only when "in the money"
- Can be traded any time until expiration
- Contracts measured in underlying
- No "right to buy" underlying
- Size underlying price matters
- Risk may be unlimited
- May require collateral
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This site and all information contained within is for informational purposes only. Nothing written here should be construed as specific investing advice.
This site and all information contained within is for informational purposes only. Nothing written here should be construed as specific investing advice.