Background Information on Binary Options


Why are they called binary options?


The binary option is called "binary" - which means "composed of two parts or two pieces" - because there are only two possible outcomes for a binary option: either the option will finish UP (ABOVE) or DOWN (BELOW) its value at time of purchase.

Purchasing a binary option contract means you are given the choice of selecting from two possible outcomes -- if the option will finish UP or DOWN -- one of which will certainly occur (unless of course the asset finishes at the exact same price as the current trading price which rarely ever happens and in which case the full value of the option contract is returned so you lose nothing).

Once you decide whether to take the UP or DOWN position on the option, you cannot sell or otherwise transfer the ownership of the option before the option expires, which is called the expiry time.

The expiry time indicates when the option will reach its final value and it is that final value that determines if an investment has been successful or unsuccessful. If you chose UP and the option's final value at the expiry time is ABOVE the value the option had when you invested, you have made a successful investment.

If you chose DOWN on your option and the option's final value at the expiry time is ABOVE the value the option had when you invested, your investment has been unsuccessful.

What does this mean? It means binary options offer you AT LEAST 50-50 odds to make money. Since you can only pick UP or DOWN and one of these outcomes must result at the end of the option period, whatever you pick you have a 50% chance of selecting the correct outcome.

While a 50% chance is still amazing in the field of financial investing, the SimpleTrade Method increases your chances of making successful, profitable investments to more than 89%.

History of Binary Options


How did binary options come into being?


Binary options began being offered to the trading public in 2008. They were approved by the Securities and Exchanges Commissions (SEC), the US regulatory body for financial markets, to be listed on the Chicago Board Options Exchange (CBOE).

The general public was largely kept out of this new financial market because they were uninformed of their existence and, even if they were, they were not easily accessible to people who did not have the proper channels to the CBOE.

That all changed in 2009.

Backed by investors who saw the promise in binary options being offered to members of the general public, several companies created their own trading platforms to allow for purchasing binary options digitally online; hence the name binary options sometimes also go by: digital options.

Binary options became readily available for purchase to anyone and everyone as private companies began listing binary options for sale on licensed trading websites.

Exbino quickly stood out as one of the most professional and reliable trading websites because of its use of Thomson-Reuters for its financial data and its customer support team.

Why were Binary Options created?


What purpose do binary option contracts serve in the finance world?


The basic principle underlying the binary option is that it can serve as an indication of the general public's confidence or doubt in the worth of a particular asset.

For example, if the vast majority of people purchasing binary options contracts on Microsoft stock are taking the position that the stock price will be LOWER than the current trading price in one week's time, that is a strong indication that the overall sentiment of the general trading public is that value of the asset is decreasing.

If, on the other hand, the vast majority of people purchasing binary options contracts on Microsoft stock are taking the position that the stock price will be HIGHER than the current trading price in one week's time, that is a strong indication that the overall sentiment of the general trading public is that value of the asset is increasing.

This information can help inform financial traders and investors about the general feeling on a specific asset in order for them to decide whether or not to buy or sell the asset in question.

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