Binary Options vs. Forex Trading: Understanding the Difference

The simple point being made here is that in binary options, the trader has less to worry about than if he were to trade other markets.

The market is open around the clock, five days a week. The expiration value of the binary is decided based on whether the market price is above the strike price or not. 

If the price action does not touch the price target the strike price before expiry, the trade will end up as a loss. You can exit your position prior to expiration at the current market price.

What is a Binary Option and How Do You Make Money? 

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Defining Binary Options 

Examples of Binary Options in Forex. Let’s use the EUR-USD currency pair to demonstrate how binary options can be used to trade forex. We use a weekly option that will expire at 3 P.M. on Friday, or four days from now (or Monday).

Binary Options The principle of binary options is very easy to understand. You, as a trader, have to only decide, whether the price of an underlying asset will be higher or lower at a certain point in time than it is now. The platform is a trading terminal through which you can trade binary options anywhere and at any time. The right choice for a trading platform opens up all of the features and presets for comfortable trading. 

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Binary trades operate on specific timelines. The trader has no control over when a trade begins or ends once a trade has started. Before a binary options trade begins, users must select when the order expires. Each option has a start time and an end time. At the expiry time, the trade automatically closes. The binary options market allows traders to trade financial instruments spread across the currency and commodity markets as well as indices and bonds. This flexibility is unparalleled, and gives traders with the knowledge of how to trade these markets, a one-stop shop to trade all these instruments.

When trading with a binary option broker that allows early closure of an option trade, the value of the option tends to move along with the value of the underlying asset. For example, with a “put” (or “down”) option play, the value of the option contract increases as the market moves below the target (strike) price. Aug 29,  · Binary options can involve the trading and hedging strategies used in trading traditional options. You should always conduct a market analysis prior to each trade. There are many variables to consider when trying to decide whether the price of a stock or other asset is going to increase or decrease within a specific time period%(16).

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