Tag Archives: safety

safety

Binary Options in UK and The Potential Changes in Regulation

The first thing to understand is – are binary options a financial product or a gambling one? UK consumers who enjoy trading binary options might not know that currently this activity is not an FCA (the UK’s Financial Conduct Authority) regulated one. It is not considered a form of investing and they do not have […]

By binbet.com | Security | binary options, FCA, firms, framework, legal, protections, regulation, safety | 1 Comment | 2

… But What’s a Binary Option?

A binary option is a type of option where the payoff is either some fixed amount of some asset or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The cash-or-nothing binary option pays some fixed amount of cash if the option expires in-the-money while the asset-or-nothing pays the value of the underlying security. The options are binary in nature because there are only two possible outcomes. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and Fixed Return Options (FROs) (on the American Stock Exchange). Binary options are usually European-style options.

For example, a purchase is made of a binary cash-or-nothing call option on XYZ Corp's stock struck at $100 with a binary payoff of $1000. Then, if at the future maturity date, the stock is trading at or above $100, $1000 is received. If its stock is trading below $100, nothing is received.

Lost Your Password?

Tag Archives: safety

Binary Options in UK and The Potential Changes in Regulation