Tag Archives: time value

time value

Price fluctuations for the binary options market

Due to the equality proprietary to the binary options dubbed ‘out of the money’, the investment is substantially lower than in the case of the conventional counterpart of the said option. Because the profit resulted from ‘in the money‘ binary options is preset on the expiration date, their purchase is more convenient. However, as opposed […]

By binbet.com | Price Fluctuations | price charts, price fluctuations, risk, time value, trading strategies, trading techniques | 0 Comments | Like

… 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: time value

Price fluctuations for the binary options market