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Essential Information for Binary Option Traders

Binary Trading Guide

“Trade World Markets using Binary Options”

Binary Options Trading Guide v1.0
-Copyright © March 2014
George Protonotarios ©-All rights reserved worldwide
Distribution by Qexpert.com

“Trade World Markets using Binary Options”
“The Basics for Beginners and
Semi-Advanced Binary Option Traders”

-TABLE OF CONTENTS(1) Introduction to Binary Options
- Main Characteristics
- Signal Providers
- Basic Terminology & Features

(2) Types of Binary Options
- Hi gh- Low O pt i ons
- Range or Boundary Options
- Touch / No Touch Options
- Binary Option Pairs
- Binary Options Builder

(3) Binary Options Rating Formula v3.5
- A Revolutionary Way of Rating Financials

(4) Compare Binary Option Brokers
- Binary Option Brokers & Basic Information

Binary Trading Guide v1.0 – Qexpert.com


(1) Introduction to Binary Options
Binary Options constitute a financial instrument which offers easy trading of
the Global Financial Markets. Using Binary Options you may trade the daily
price fluctuations of any Financial Market including Forex, Stocks, Indices and
Commodities. Binary Options have only two possible outcomes win or lose,
that is why they are called Binary or Digital Options (0/1). An important
feature when trading with binary options is the pre-determined risk and
return. That means that for each and every trade you place you now exactly
from the beginning how much money you can win and how much money you
can lose. The Binary Options are provided by online brokerage companies
called binary options brokers. Each broker offers different trading terms and
You may find several binary option brokers at the end of this e-book. Here
are also some comparisons at BinaryValue.com:
» Fx Traders | » Oil Traders | » Gold Traders | » Stock Traders | » US Traders

Binary Options Main Characteristics
These are the most important characteristics of Binary Options Trading:
(1) Easy Trading via Simplified Trading Platforms (desktop or mobile trading)
(2) Pre-Determined Return and Risk
(3) Profit from both market directions (Bullish and Bearish)
(4) Profit from both Trending and Ranging Markets (Read about Range
Options below)
(5) Even tiny fluctuations can lead to high rewards
(6) Trade 24hours per day (24/5)
(7) Trade in any Financial Market (Forex, Stocks, Indices, Commodities,
Metals, Energy)
(8) Trade in Multiple Timeframes (from 60 seconds to several months)
(9) Trade using a Binary Options Builder and design your own binary option
(10) High Bonus Promotions for new clients, most of the times you can
double your deposited funds (100% welcome bonus)
■ Promotions for Forex and Binary Option Traders at Forex-Rebates.com
Binary Trading Guide v1.0 – Qexpert.com


Binary Options as any other derivative contract were initially created as a
hedging tool. That means that via derivatives investors can hedge against the
risks incorporated in real markets. For example an importer can hedge against
the currency risk of his imports. But eventually derivatives evolved as a pure
speculative trading mechanism. As in any other derivative, the profit potential
when you trade with binary options is huge but also be aware that there is an
equal risk of losing your funds. High diversification in your portfolio should be
considered as a ‘must’ whatever instrument or market you trade.

How Can You Trade?
In order to trade world markets using binary options you must first achieve a
full understanding of how things work in the financial markets. Then you must
find and implement a trading strategy that can lead you to the right trading
► Learn about Binary Strategy | ►Trading Stocks Strategy | ► Trading Forex
After learning the basics about financial markets, you must design a trading
strategy / trading system that reflects your trading style and your overall risk
profile acceptance. In any case you should never trade with funds that you
may need in the future (golden rule).

Binary Options Signal Providers
If you can’t build your own system, alternatively, you can use an external
source of trading signals. Here are some specialized Binary Option Signal
Providers and their reviews. The first signaling service (Autobinary) is
purchased one-off while the other three are offered via monthly subscription
» AutoBinary Review
(Forex Currencies, Major Indices, Stocks, 120 USD One-Time Payment)
» Winner Signals Review
(Forex, Commodities, Stocks & Indices, 49 USD / month)
» The Binary Signals
(Forex, Commodities, Stocks & Indices, 97 USD / month)
» Binary Signals Review
(Specialized in Forex, 97 USD / 2 weeks)

Binary Trading Guide v1.0 – Qexpert.com


Binary Options Basic Terminology
These are the basic terms and features of Binary Options Trading:
■ Expiry: It is the time when the binary option ends (from 1 minute to
several months).
■ Strike Price: It is the price level that determines if a trade is winning or
losing at the end of the Expiry Time.
■ In-The-Money: In-The-Money means that the current price of an asset is
higher than the strike price of the option contract. For example if you have
bought Gold with strike price $1,400 and now it is trading at $1,400.1 you are
■ Out-of-The-Money: The opposite of In-The-Money contracts. It means
that the current price of an asset is lower than the strike price of the option
contract. It is bad news in simple words.
■ Payout Rate: It is the percentage of your investment that you will be paid
as a reward if your forecast is right (payout rates are usually 75-90%).
■ Refund Rate: It is offered in case of a lost trade. Some brokers offer a
refund for traders losing their positions (usually 5-10% of the initial
■ Call / Put: A Call Option is an option contract that predicts a rising market
and a put option is a contract that predicts a declining market.
Tip: You can also remember that difference as “Call the Market Up and Put
the Market Down”.
■ Early Closure / Take Profit: This feature allows traders to take their
profits before the expiry time occurs. As you can guess the payout rate in this
case is diminishing.
■ Rollover Feature: The Rollover feature allows traders to expand their
timeframe if an option is closing to expiry and it will be probably out-of themoney. Rollover can be applied once for each trading position and of course
comes with an extra cost.
► Learn about Trading at TradingCenter.org | ► Forex Trading at FxPros.net
Binary Trading Guide v1.0 – Qexpert.com


2. Types of Binary Options
Binary Option Brokers offer more and more binary option types in order to
cover more trading needs and attract more customers. These are the most
common types of binary options:

High-Low Options
High-Low is the most common type of binary option. These binary options are
often found as Up-Down Options. High-Low options offer access to any
financial market (stocks, indices, commodities and Forex). High-Low options
are also called the fixed-return options, this is because this option type has a
specific expiry time and also a specific strike price. The only thing a trader
must do is to forecast the upcoming market's direction. If he proves correct
then he realizes a profit. This profit has the form of a fixed return regardless
of how much the price of an asset / market has moved. If the trader proves
wrong regarding the market's direction then he loses his investment.
Example High/Low Binary Options
Let’s assume that a trader based on technical analysis forecasts that NASDAQ
is going to rally for the rest of a specific session. He buys a call binary option
on NASDAQ with an expiry of 2 hours. As it was mentioned before, a Call
means predicting a rising market. Let’s assume that NASDAQ is trading at
4,000 points at the moment. Here are some hypothetical figures
■ Nasdaq Call Option, Expiry 2- hours
■ Investment: $200
■ Strike Price 4,000 points
■ Payout Rate: 75%
■ Refund Rate: 10%
In the above example -after 2-hours the contract expires:
1-If the trader proves right and NASDAQ has moved above 4,000 points, then
the option will pay him 75% x $200, that means he will make a profit of $150
and his total investment it will be now $350.
2-If the trader proves wrong he will lose his investment of $200, but he will
take 10% back as a refund, that means $20 as for the example above.

Binary Trading Guide v1.0 – Qexpert.com


Using binary options you can trade any amount between $10 and $10,000
(depends always on the binary option broker).

Other Types of Binary Options
There are many other types of Binary Options; here are the most common

Range or Boundary Binary Options
A Range or Boundary binary option allows traders to choose a specific price
range of the asset they wish to trade. If the price of the asset remains within
that specific range selected, then a payout is received as a reward. If the
price of the asset moves out of that specified price range, then the
investment is lost. The payout rate is not fixed and it may be huge. The
payout rate is variable while the risk is fixed and limited to the amount of the
initial investment.

Touch / No Touch Binary Options
Touch / No Touch options provide the chance to predict that the price of a
financial asset will reach or not a specific price level. Touch / No Touch
options are designed for trading the extent of a price movement. The rewards
are variable while the risk is fixed. As in the case of Range Options, the
payout rate may be huge.

Binary Option Pairs
This is a very interesting binary options type. Pairs offer the chance to trade a
financial asset against another financial asset of the same class. For example
you may trade a specific share against another share.
Example: A trader believes that the share of IBM is underperforming in
relation to the share of Yahoo.
■ Pair Option, IBM/ Yahoo (Expiry 4- hours)
■ Investment: $300
■ Payout Rate: 80%
■ Refund Rate: 0%
If the share of IBM has perform better than Yahoo after 4 hours then the
binary option pair offers a reward of $240 and the total investment is now
$540. If not then he loses $300. Does not matter if these two shares had

Binary Trading Guide v1.0 – Qexpert.com


fallen or both shares had risen, what is important is the difference between
the performance of these two shares.
■ Review Brokers Offering Option Pairs: » CapitalOption | » GOptions | »
StockPair | » OptionRally
The great advantage of trading via Pairs is the ability to neutralize the general
market’s conditions. The only thing that matters is that your prediction proves

Binary Options Builder
Binary Option Builders offer traders the chance to design their binary option
contracts. Here are some Option Builder Features:
(1) Select a Trading Asset (Commodities, Forex, Stocks etc)
(2) Select your Expiry Time (1 minute to several months)
(3) Select Direction (Up or Down)
(4) Select the desired combination between Payout / Refund Rate
(5) Enter an amount to trade
■ Review Brokers Offering Option Builder: » OptionRally | » GOptions

Binary Trading Guide v1.0 – Qexpert.com


(3) Binary Options Formula v3.5
The introduction of the Rating Formula v.3.5 by BinaryValue.com is serving an
important mission. This mission is to provide a 100% objective framework to
evaluate and to rate the world's binary option brokers. By rating brokers in an
objective way users are able to choose the brokerage service that suit them
best. Furthermore, users are able to identify trading aspects that they weren't
aware of and thus enhance their knowledge upon trading.

Recent Versions History:
» Binary Option Brokers Formula -V.3.5, at BinaryValue.com
» Forex Broker Rating Formula –V.4.0, at TradingCenter.org –Forex Brokers
Here is a comparison table based on Rating Formula v3.5 at BinaryValue.com:
► Compare Brokers and their Ratings using the Formula v3.5
In the following table you may find a comparison table of popular binary
option brokers plus links with their full reviews and ratings.

Binary Trading Guide v1.0 – Qexpert.com


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