Learn how Binary Options can profit for you

First and foremost it’s vital to understand the different elements in the phrase ‘stock option trading’.

Stock – this is the value of a company’s assets and profits. They are represented by shares and show what a company is worth in the market place.

Option – an option is a contract which gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a set price within a pre-determined time frame.
Trading – when a buyer invests on the performance of an asset.
Stock option trading is when the underlying asset chosen for the option trade is stock.

So, whereas in traditional stock trading an owner is buying or selling actual shares in a company, in stock option trading the owner is purchasing the option i.e. he is entering into a contract to buy or sell stocks at a fixed price within a specified time frame. (see Option Trading).

How is a stock option trade carried out? Assume you’re the buyer:
1)Choose the company whose stock the contract will taken out on
2)Select the expiry time of the option – end of the hour, day, week or month
3)Decide which direction you think the stock will move in – if you think it will increase then purchase a Call option. If you think it will decrease then purchase a Put option
4)Enter an amount and purchase your option

Now, one of 3 things may happen:
the option expires in-the-money (i.e. the price of the stock rises above the strike price) and you receives a 65-71% payout
the option expires out-of-the-money (i.e. the price of the stock moves below the strike price) and you receive a 15% payout (a benefit of trading on the anyoption™ online platform)
the option expires at-the-money and the buyer receives his inital investment amount back in full

Why trade stock options as opposed to traditional stock trading?
There are several reasons why the former has risen in popularity.
I.Since it is a binary option and the outcomes for stock option trading are known from the onset of the contract, the risks involved are reduced and fully known at the start
II.High profits are more easily obtained since only a marginal change in price is needed for a successful outcome and a 65-71% payback – this also opens up shock option trading to buyers who otherwise could not afford high stock prices
III.Less in-depth knowledge of the stock market is needed which also again makes stock option trading more accessible to a wider audience
IV.Option trading can be carried out on secure online trading platforms (such as anyoption™ ) which increases the flexibility and control of option trading whilst also making it more geographically available

We are all familiar with the basics of trading – a trader studies the market and buys an asset at certain price, hoping that its price will rise and he will sell the asset at the new higher price and profit from the difference.

In binary options trading though this is different. Yes, the trader, otherwise known as the buyer, will look into the market and yes he will decipher which way he thinks the market will move, but the outcome and method of profiting is somewhat different.

Here the differences are clearly explained:
Traditional trading: there are a multitude of possible outcomes, none of which are known when buying the asset
Binary option trading: there are only 3 possible outcomes – or the asset expires in-the-money, out-of-the-money or at-the-money. All three outcomes are fully known when purchasing the option and therefore all potential risks can be taken into account.

Traditional trading: the profit or loss is dependent on the magnitude of the price rise/fall of the asset e.g. if 200 shares are brought at $10 each, the amount of profit or loss is totally dependent on how much the price of the asset rises or falls
Binary option trading: it is only the direction of the move that is important and not the magnitude of it. So, if a buyer places a $2,000 Call option on an underlying asset with a 71% return rate, he knows from the onset that if the option expires in-the-money then he will receive $3,420 and if it expires out-of-the-money then he will receive a 15% payback of $300.
This is because all of the outcomes of a binary option trade are known from the onset of the contract. This reduces the risk factor and also limits the knowledge that a buy must have before he purchases an option.

Traditional trading: the trader owns the asset itself
Binary option trading: a buyer is just trading on the performance of an asset

Traditional trading: the trader will need an in-depth knowledge of the market and the asset being traded
Binary option trading: a buyer need only have a sense of the direction in which the asset is likely to move in since he is just trading on the performance of an asset, rather than the magnitude of the price change

Traditional trading: the asset can be sold whenever it suits the trader
Binary option trading: when buying the contract, a buyer can decide between different expiry times – end of the hour, day, week, or month. Once his expiry time has been selected and the option is purchased, this cannot be altered or reneged.
Binary option trading is an extremely unique method of investment and it creates a new and exciting offer for those wanting to control their investment risks.

Options Trading is when an owner enters into a contract to trade a particular underlying asset. They are not buying the actual asset itself, but rather they are buying an option i.e. they are entering into a contract to buy or sell assets at a fixed price within a specified time frame.

The benefit of binary options trading over asset trading is that there is a much greater chance of a trade being successful, then if a person bought the asset itself. Also, since options only cost a fraction of the actual price of the underlying stock, option trading allows investors to participate in the move of a high priced asset, using only a small capital outlay.

There are different types of assets available for trading options: currency pairs, indices, stocks and commodities. anyoption™ offers over 50 assets which can be traded online. Investors can choose from indices in the United States, Europe, the Americas, Asia and the Middle East; 12 different combinations of currency pairs; commodities of copper, gold, oil and silver; and stocks in top companies such as Apple, Coca Cola, Google, Microsoft and Barclays.

Options Trading
A binary option, also referred to as a digital option or a fixed return option, is an option in which payout is determined at the onset of the contract. It pays a fixed amount of cash if the option expires in-the-money, independent of the magnitude by which the price of the underlying asset moves. anyoption™ offers you a 65%-71% payout when the option expires in-the-money, and a 15% return if the option expires out-of-the-money. The option cannot be sold before its expiration.

What is an Underlying Asset?
A commodity, index, stock, currency pair or any other financial asset that constitutes the basis for creating an option.

What is a Call Option?
An option that provides the holder with a profit when the underlying asset increases in price compared with the level it was purchased at. In the event that the option expires exactly at the same price, the full original investment amount will be returned to the investor.

What is a Put Option?
An option that provides the holder with a profit when the underlying asset depreciates relative to the purchase level. In the event that the option expires at exactly the same price, the full original investment amount will be returned to the investor.

What is the investment amount?
The amount of money invested in an option.

How to invest?
To invest, you must choose between “call” or “put” options for a given underlying asset. Clicking on the call/put button will open an investment sheet in the same box, where you will be requested to enter the amount of the investment and to approve execution. The selection may be canceled by clicking on “X” at any time before approval of the transaction. Please note that the level keeps updating in the investment sheet.

What return will I get for a successful investment?
A successful investment will result in a guaranteed return indicated on the site for the underlying asset that you selected. In the event that the option expires out-of-the-money, you will get a 15% refund of your investment amount.

What return will I get in the event that the option expires out-of-the-money?
In the event that the option expires out-of-the-money, your account will be credited automatically with 15% of the original investment amount. For example, if you invested $1,000 in a Nasdaq Call option, and at the time of expiry the level was lower than that at which you made the investment – you will automatically receive a refund of $150.

What is the difference between All Or Nothing Options and anyoption™ product?
In some commercial banks, traders can price for individuals a personalised binary option, where the individual can either get certain agreed return or lose all of his/her investment. In anyoption™ the return in case of in-the-money expiry is agreed in advance (65-71%) and on top of it there is a guaranteed 15% refund in case the option expired out-of-the-money.

What is the maximum investment amount?
The maximum investment amount for a single option is 3,000 USD (or the equivalent in one of the other available currencies). However, multiple options may be purchased, one following the other, at a higher and basically unlimited accumulated amount. If you wish to purchase options for greater amounts, you will have to purchase an option at the maximum amount of 3,000 USD, and then purchase an additional option, and so on.

What are the levels displayed in the trading boxes?
Level – the quoted price for an option of an underlying asset. The level changes and is updated frequently according to different parameters that anyoption™ proprietary algorithms take into account. The levels we present in the trading boxes in our home page are those at which anyoption™ is willing to sell options, and are not the real time market levels.For more details about how expiry levels are determined click here.

What is the expiry level?
The expiry level is the level of the underlying asset at the time of expiry of the asset according to Reuters. This is the determining level if the option has expired in-the-money or out-of-the-money. A different expiry level is determined for each underlying asset. The calculation of the expiry levels is detailed here.

What is the expiry time?
The expiry time is the time and date at which an option expires.

What is the expiry time?
The expiry time is the time and date at which an option expires.

What is the difference between purchasing options in anyoption™ and buying put and/or call options in the stock market?
The options available in anyoption™ are binary options (see definition above). They are different to standard (vanilla) option chains that are offered by stock exchanges. The latter typically have longer expiry dates, significantly fluctuating yields, and can be sold before expiry. Binary options have a fixed return and are offered for different expiry points from the end of an hour to the end of a month.

What is the meaning of the colors for the levels on the trading floor?
The colors indicate the direction of trading relative to the previous trading day. Green indicates a higher level than the anyoption™ expiry level for the previous day’s trading. Red indicates a lower level than the anyoption™ expiry level for the previous day’s trading.

What happens if the expiry level of a given underlying asset is identical to the level at which the transaction was made?
In the event of expiry at an identical level to the transaction level, the amount of the investment is returned to the customer. For example, if the customer has made a 1,000 USD call investment on Nasdaq at a level of 1,620.23, with an expiry time of 11:00, and the level at the expiry time was 1,620.23, the full investment amount is returned to the customer, and the customer’s account will be credited by 1,000 USD.

What is the time zone of the expiry time?
The site’s trading hours and expiries time are shown according to your PC’s time zone.

Are the profits taxable?
anyoption™ customers are responsible for their taxation liabilities, if any, at their place of residence. See our general terms for more details.

Why can’t I invest?
All our assets are available during market trading hours. Outside market trading hours, the asset will be displayed in anyoption™ but will be marked as disabled. On rare occasions, investments are not available for certain assets owing to technical reasons. Usually these problems are quickly resolved, and you may try again shortly. Other than this, you will not be able to invest if you have insufficient funds in your account.

Where can I view the precise trading hours of each asset?
A detailed list of all our available assets, their description, expiry times, symbol and trading hours is presented in the Asset Index.