Binary Option Through & How To Trade

#Binary Options Traded Through the Exchange

In 2008, the Securities And Exchange Commission of the United States of America approved trading cash-or-nothing binary options through the American Stock Exchange and Chicago Board Options Exchange. Because of this standardization, continuous quotations can be traded through exchanges. In 2009, the North American Derivatives Exchange started offering binary options.

How to Trade #Binary Options:

An investor can make a “CALL” option if he thinks the price of the underlying asset will go up. He can make a “PUT” option if he thinks the price will go down at a predetermined date and time. At the onset of the transaction, the investor is already informed of the risks. At the end of the contract”s term, the issuer pays the investor if he decides correctly. Otherwise, the investor loses his investment.

Before the expiration of the contract, the investor can opt to sell his position. The value of the option decreases as the difference between the strike and spot prices increases.