Binary Options Basics

Binary options are easy to understand. They're called 'binary' because there can be only two outcomes - win or lose. If your prediction is correct, you receive a payout that is determined at the start of the trade. If not, you just lose your initial stake.

You only need to make four decisions to execute a binary contract.

1. Choose the Underlying

The first thing to do is choose the asset you wish to trade, such as gold or oil, stocks or FX rates (The value of a binary option is derived from the price of the underlying asset). A big advantage of trading options is that you are not buying or selling the actual asset.

2. Choose the Duration of the Trade

Each binary option contract runs for a set time - with Binary.com you can choose a contract that runs between 10 seconds and 365 days.

3. Choose how you want to Trade the Market

Binary.com offers you four ways to trade a particular asset:

  • Rise/Fall - Predict the market rising or falling from its current level.
  • Higher/Lower - Predict the market ending higher or lower than a price target.
  • Touch/No Touch - Predict the market touching or not touching a price target.
  • In/Out - Predict the market staying inside or going outside two price targets.

4. Choose your Stake and Potential Return

Specify your payout, which is your potential return if your prediction is correct. Our system will proceed to calculate your stake, which is the total cost of purchasing the contract. Binary.com offers payouts from $1 to $50,000.