Understand the trading terms for each deal. How different are the terms (for instance, "strike price") on one side of the trade (above strike price) compared to the reverse side (below strike price)? If they are significantly different, the buyer would be forced into the unusual position of having to predict the magnitude as well as the direction of a price movement.
Nadex traders are able to trade an impressive range of assets that include Currencies such as EURUSD and GBPUSD, Stock Indices such as Wall Street 30 and FTSE 100 as well as Commodities such as Gold and Crude Oil. Nadex also recently added Bitcoin to its tradable assets while it remains one of the few brokerage firms to allow traders bet on Events such as Non-farm payrolls and Fed Funds Rate.
I am sorry but Mr. Harrison obviously knows nothing about binary options trading. Has anybody bothered to examine his article? Example: III – Basic Options Strategy “Your 30 minutes call option wins and the 15 minutes put option losses. You will have earned $185 from the 70% call winnings and the 15% consolation refund from the put option (the opposite can happen, put option wins and call option losses).” Absolute nonsense. You invest $200 in total (2x 100). So if one trade wins and the other loses, your RETURN will be $185 (170 from the winner and 15 from the… Read more »
In the online binary options industry, where the contracts are sold by a broker to a customer in an OTC manner, a different option pricing model is used. Brokers sell binary options at a fixed price (e.g., $100) and offer some fixed percentage return in case of in-the-money settlement. Some brokers, also offer a sort of out-of-money reward to a losing customer. For example, with a win reward of 80%, out-of-money reward of 5%, and the option price of $100, two scenarios are possible. In-the-money settlement pays back the option price of $100 and the reward of $80. In case of loss, the option price is not returned but the out-of-money reward of $5 is granted to the customer.