TraderXp

The Binary Option  is in essence nothing more than a prediction  on which way the price of a stock, commodity,  index or foreign currency will move by a designated expiration time. You never purchase or own the asset as you’re only predicting the direction that the asset will go.  There are only two possible outcomes and the price of the asset does not matter.  As far as you’re concerned, all that matters is if your  prediction was correct or incorrect.   

Binary Options in Global Financial Markets

Binary options fall under the umbrella of exotic options but within financial markets they are often referred to as digital options. While digital options are very simple to understand and easily traded, the calculations behind the pricing is sophisticated and so they are considered exotic options. 

Digital options are usually traded OTC (over the counter) across all assets in financial markets but more commonly used within the For

ex and Interest markets. Recently numerous stock exchanges have produced listed digital options on selected stocks, commonly known as FRO (fixed return options). Today the CBOE offers fixed return options on S&P500 and VIX, also 20 stocks were listed on the AMEX in 2008.

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