Let’s take the adhering to question as an example: Will the price of gold be above $1,250 at 1:30 p.m. today? If you believe it will be, you buy the binary option. If you assume gold will certainly be listed below $1,250 at 1:30 p.m., then you sell this binary option. The cost of a binary option is always between $0 and $100, and also similar to various other monetary markets, there is a proposal and ask rate.
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The individual who marketed to you has a maximum danger of $55.50 if the option settles at $100–$100 – $44.50 = $55.50. A trader might purchase numerous contracts if desired. Below’s an additional example: NASDAQ United States Tech 100 index > > $3,784 (11 a.m.). The current bid and offer are $74.00 as well as $80.00, specifically.
If you assume the index will certainly be listed below $3,784 back then, you cost $74.00, or position an offer above that price and hope someone buys it from you. Top 10-Binary-Options-Copy Trading-Review-and-Top 10-Binary-Option-Brokers-2020-in-Equatorial Guinea. You determine to sell at $74.00, believing the index is mosting likely to drop listed below $3,784 (called the strike cost) by 11 a.m.