Binary option formula trading

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(c) 2017 INVESTED iQ Invested IQ. DISCLAIMER: We provide real estate education and training. We do not sell a business opportunity. We make no earnings or return on investment claims. Additionally, we do not offer tax, accounting, financial or legal advice. Investing in real estate involves risk, and you could lose money. Prior to undertaking any real estate transaction, you should consult your own accounting, legal and tax advisors to to evaluate the risks, consequences and suitability of that transaction. Marketing, education and fulfillment services for Invested IQ are provided by Response. huge_it_share Calculating the Breakeven Ratio and Profit Margin in Binary Options. October Special Offer: Get started with only €50 at HighLow #1 Ranked regulated broker: Get Started Here! Some of the most important things one will have to understand in binary options trading are the notions of breakeven ratio and profit margin.

The breakeven ratio is the percentage of accurate trades one will have to execute in order to make profits. The profit margin is the difference between the breakeven rate and the ratio of accurate trades executed by traders. This is the percentage that denotes the pure profits traders are making. These are also one of the notions that most commonly are never mentioned by binary options brokers and as such, the overwhelming majority of people do not even have an idea about. But like explained, you can only know if you’re making profits in binary options if you understand what these ratios are. The breakeven ratio in binary options trading exists because in binary options you will be paid out if you predict the outcome of the movement of certain assets. The payout however will most commonly never be 100%, meaning that even if you get 50% of your picks right and 50% wrong, you will actually lose money. The formula to calculate the breakeven ratio is the following: Where B stands for breakeven ratio, I for in the money ratio and Ot for out of the money ratio. The profit margin is the difference between your winning ratio and the breakeven ratio. The formula to calculate this is: Where W stands for winning ratio. If you don’t know what these ratios mean, then please continue to read this article.

Everything is explained below in detail. Best Winning Tips for Newcomers. Breakeven Ratio & Profit Margin. Candlestick Winning Strategies. Doji Candlestick Technical Analysis. Engulfing Candlestick Analysis Method. Guide on Money Management. Guide on Trading Stocks Successfully. How Much Should I Invest Per Trade in Binary? How to Make Money with Long-term Strategies. Trading Options on News.

What is the Break Even Ratio? The breakeven rate is the percentage of the accurate predictions you will have to make in order not to lose any money. If your percentage of accurate predictions coincides with the breakeven ratio, then you will not lose money but you will also not make any money at all. As you know, in binary options you will be making money if you predict the future movement of an asset. In order to be able to make a prediction, you will have to invest a certain sum of money. If you make a correct prediction, you will be paid out with the repayment of the investment plus a % of that investment. In most cases this percentage is never 100%. This means that correctly predicting 50% of your predictions will not mean that you will break even. In order to break even (not lose anything but also not win anything) you will have to have a breakeven percentage of above 50%. Most traders do not even have a clue that this rate even exists. Brokers usually don’t say anything whatsoever about it either. How to calculate the breakeven ratio? But fortunately it is not so hard to calculate this rate.

The only things you will have to know about are a few parameters. These parameters are the “In the money ratio” and the “Out of the money ratio”. Using these, you will be able to easily calculate the breakeven ratio. In the money percentage. The in the money rate is the ratio of the profits you will be making in case you make an accurate prediction. In other words, the in the money percentage is basically the payout percentage offered by brokers. A payout percentage of 80%, for example, means that in case you make an accurate prediction, the broker will repay your investment and offer you a commission of 80% of the investment amount. Out of the money percentage. The out of the money ratio is the percentage of your investment the broker will take away in case you do not make an accurate prediction. In most cases, when you make an inaccurate prediction the broker will take away all the money you have invested. In this case, the out of the money percentage is 100%. However, some brokers also offer so-called rebates. Rebates basically represent the percentage of your investment the broker will not take away in case of an inaccurate prediction.

Most common rebates range between 5% to 15%. So, if a broker offers rebates of 15% on losing trades, then your out of the money ratio is 85%. Breakeven Ratio Formula. The formula to calculate the breakeven percentage is the following: B – Breakeven ratio. I – In the money ratio. Ot – Out of the money ratio. In order to better understand these, let’s look at a few examples that involve the breakeven rate. Let’s suppose that the broker offers a payout rate of 80%, meaning that the in the money ratio (I) is 80%. The broker does not offer any kind of rebates at all, meaning that the out of the money ratio is 100% (the broker will take away all loses). In this case, you can calculate the B the following way: B = 100% (100% + 80%) Let’s remove the percentages for the calculation’s sake: B = 100 (100 + 80) Now let’s add back the percentages: And this brings us to: What this means is that in the case of a payout rate of 80% and 0% rebates you will have to accurately predict 55,55% of your investments in order not to lose any money at all. Let’s take an example of a rebate now. Let’s continue to use a payout rate of 80%, as in, an in the money ratio (I) of 80%. Now, imagine that a broker offers a rebate of 10%. In this case, the out of the money ratio (Ot) is 100% - minus the rebate, which in this case is 10%, so the Ot is 90%. Let’s skip the math’s part now. You can calculate this yourself with a pocket calculator: So, as you can see, in this case you will only have to accurately predict 52.91% of your trades in order not to lose any money at all. Choosing a broker that offers a rebate is extremely rewarding as you can see. Example with boundary option. A limited number of binary options such as boundary options, 60 seconds options and one-touch options offer payout rates of above 100%.

What this means is that in these cases your breakeven ratio may as well be below 50%. However, it’s much more difficult to predict the outcome of these kinds of options and your winning percentage will usually be below 50% even in case you just make random bets without any method. So let’s imagine that a broker offers a payout rate of 200%, meaning that the in the money percentage is 200%. The broker does not offer any rebates, so the out of the money ratio is 100%. Based on this, the breakeven rate is as follows: B = 100% (100% + 200%) What this means is that in order for you not to lose any money at all you will have to correctly predict 33,33% of all the investments you have made. Calculating Binary Options Profit Rates. So, now you know how to calculate what percentage of your investment will have to be successful in order to not lose any money at all. However, obviously you will want to know how much actual pure profits you are making as well. Calculating this is also extremely easy and works using the formula below: P – Profit ratio or profit margin. W – Winning ratio. B – Breakeven ratio. So, in order to calculate your profit margin you will have to subtract the breakeven ratio from your winning ratio. The winning rate (W) is the ratio of successful trades. For example, if you have executed 100 trades from which 84 were successful then your winning ratio is 84%. Let’s take the example below: You execute 46 trades from which 36 are successful. In this case your winning rate is (36 * 100) 46 which is equal to 78%. Imagine that the broker does not offer any kinds of rebates meaning that the out of the money ratio is 100% and offers a payout rate of 85%. In this case your breakeven percentage is 100% (100% + 85%), which is 54%. As such, your profit margin (P) is 78% – 54% which is 24%. So, let’s assume that you were investing $50 on all of the 46 trades that you have executed in the example above.

This means that you have generated a total of $553 in profits. This is calculated by multiplying the number of trades with the investment amount and with the profit margin: 46 * $50 * 24% = $553. In other words, you have invested a total of $2,300 and have won $2,853, from which $553 is profits. Naturally, you do not have to deposit $2,300 at once in order to achieve that. You may as well deposit as much as only $250 (for example) and progress in increments of $50 investments. In this case you will be reinvesting your profits. So, this is how you calculate breakeven ratios and profit margins in binary options trading. As explained initially, binary options brokers most commonly never reveal this to traders. The information we presented above is generally never available at any binary options broker. However, understanding the above mentioned issues is extremely important if you want to become a winning binary options trader.

For this reason, we STRONGLY recommend you do these calculations at every binary broker you register at. You should also constantly follow your profit margin with the second formula mentioned in this article. This way you will know EXACTLY how many profits you are making. And this is all for this method guide. Thanks for reading this and we would much appreciate if you could share this with your friends or fellow traders so that more people will be able to understand how breakeven percentages and profit margins are calculated in binary options trading. Additionally, you may as well continue to read our other binary options method guides that are listed on the menu on the right in order to learn about more advanced winning strategies. Latest Binary Options Articles & Guides. In this detailed and complete guide I will talk about how much money you should invest per trade when trading binary options. Too many websites claim that you should invest as much as possible but is this really effective. and safe? Learn to use long-term binary options strategies in order to make money in binary options trading. Find out why these strategies are the easiest to implement. Learn how to trade stocks in binary options.

Trading stocks is one of the most difficult ways to make money in binary trading but if done right it can offer massive winning and payout opportunities. Binary option formula trading Binary options also called digital options or fixed-return options (FRO) are a simple way to trade price fluctuations in a wide range of financial markets. Binary options have different profits, costs, risks, liquidity structure and investment processes. than the traditional (vanilla) options. The key distinguishing features of binaries are: Easy to trade &ndash simple and straightforward to understand Predetermined payouts and risks &ndash unlike a traditional vanilla option, the possible gain is binomial, predefined and works as &ldquoall-or-nothing&rdquo Payouts &ndash In-the-money contracts yield returns starting from 70% of the paid premiumcontract size up to 90% Variety of markets &ndash the underlying instruments may be individual stocks, indices, Forex, commodities, etc. Small trading amounts, low deposit required &ndash binary options contractspremium with Dukascopy Bank start from as low as USD 1 No commissions &ndash Dukascopy Bank charges no fees in addition to the premium paid by the trader Numerous strike prices and expiry dates &ndash for callput binary options the strike price is the price at the start of the option contract. the game of trading binary options? The answer lies in an objective trading plan. Suppose you buy 100 bets where the sizeof the contract (premium) is the same, say $1,000: if 50 of the bets are winners then your profit from the winning bets will be 50x$1000x70% = $35,000. The loss from the losing bets will be 50x$1000 = $50,000.

Therefore, you will realize a net loss of $35,000 - $50,000 = ($15,000). Similarly, if the payout ratio was 90%, the net loss would have been ($5,000). Expressed in another way, the above equation may be written as follows: y is the profit or loss. w is the number of winning bets. k is the payout ratio. p is the premium or contract size. l is the number of losing bets. Suppose the desired profit is 50% of account equity. Suppose further the account equity is $10,000 and the premium is $1,000. Then, with a payout ratio of 70%, we can calculate the requisite success rate by re-writing the formula thus: Use a fixed premium for a certain periodepoch of trading say one day. There are mainly four variables to bear in mind, namely the desired profit , the amount of premium or contract size, the total number of bets and the success rate or percentage of winning bets.

If the number of winning bets is the subject , then the equation is written thus: It should be noted that w is an integer &ndash so the result should be rounded off to the nearest integer. If the premium is the subject , then the equation is written as follows: In the following example, we want to answer this question: What premium should I employ in 100 bets with payout ratio of 70%, in order earn $5,000 profit with a success rate of 67%? If the total number of bets is the subject, then the equation is written as: In the following example, we want to answer this question: If my bets of $1,000 each with a payout ratio of 70% are successful 3 out of 5 times, and I want to return a profit of $5000 how many bets should I place? The answer is 250 bets. You can quickly grow your equity &ndash or quickly lose it all. It all depends on how you trade the options. Using Amissio Formula For Binary Options Trading. Gamer Scene March 1, 2016 4,113 Views. The Amissio Formula is Dead! Their website no longer works. The popular new technology that is engulfing binary options traders are a variety of trading signals software. The purpose of any trading signal software, is actually to be a second set of eyes on the markets. With so many trading opportunities it is practically impossible for a human being to monitor and watch all markets. What the Amissio Formula signals software does is it scans the markets for short term trading opportunities in a variety of assets.

Amissio Formula Accuracy. When we look at the basic signals that at generated, it is almost impossible to know if they are good or not. The reason you can never be certain has to do with the timing of when you buy the options. If the system generates a buy signal on $EURUSD, how long is that signal still valid? When trading in high speed binary options, a difference of 3 minutes will be a difference of profit or loss. The real danger with a system like the Amissio Formula is the Auto Trading feature. Most people investing in binary options are always looking for the easy way to make a quick buck. Instead of waiting for a trade alert, and then taking the time to research the idea, they stumble across the auto trade feature and activate it! It usually takes anywhere from 2 hours to 3 days for the automated system to wipe out your entire trading account. Amissio Binary Options Trading Signals. Brokers Offering Algorithm Trading. We research many binary option brokers and it is practically impossible to find a broker that have their own algorithm software for investors to use. The reason is that they do not what the liability when you lose money with the software.

Some brokers like Glenridge Capital and Morton Finance, have banned the use of automated trading systems in their client terms and conditions. This has not stopped software companies like Centument and VirtNext from sending investors to these brokers. Award Winning Trading Robots. The most widely used automated trading robot for binary options is still the system from BinaryOptionRobot. com. Although it has many features under development, the product as it stands today is the most powerful system available. It only works with brokers that allow the use of API connected trading system, and many of the brokers on the system are European licensed and regulated. You can read more about the Binary Option Robot here. Binary Option Traders in the United Kingdom. European traders understand the importance of only using a licensed broker for binary options. The UK government watchdog from binary options is officially the (Financial Conduct Authority).

They have been dragging their feet, when it comes to writing up the guidelines for UK binary option brokers license. So traders from England tend to do one of 2 things. Either they choose a broker that is licensed in the EU by (like 24option. com), or they go with a licensed Forex broker that also offers binary options trading. ETX Capital for example is an licensed broker that also offers binary options options, see here. Enjoys writing about Technology that is directly related to our everyday lives. Maximus Edge Software Exposed as a Scam. Maximus Edge is the newest Crypto Binary Options trading software that we have seen before, &hellip I got an email today 4th March 2016 recommending the Amissio Formula from the GPS Robot Team. The GPS guys have written an MT4 forex robot that I have been using for a few months. Though it does not trade often, it has good reliable, small returns. So their robot has some credibility that I can confirm.

So I thought that their recommendation of the Amissio Formula binary options robot would also be credible. My mistake. I watched the Amissio video, and it looked credible, so I signed up and put US$250 deposit into the recommended broker account at Binary Brokerz. I managed to get onto the Amissio Formula trading page, turn on auto trading, similar to as in the video, and set the risk as low as possible, at 1 trade at a time and $25 risk per trade, and let it run. So much for “the world’s only no loss trading software”! My first 4 trades were all losses. I could have done better myself by tossing a coin. These are the facts relating to my experience today. Try it yourself if you dare, but from my experience it produced 100% losses from my 4 trades. I TOO………WANT my Money BACK, from this Ridiculous Website. I have $109 in USA Funds, Remaining! But Where do I GO, to Get my Money BACK?? Everytime You Click on their Website, you get an BLANK!

So, Where can I go , to Retrieve my Money. thank You James Collins from CANADA. Trading Forex With Binary Options. Binary options are an alternative way to play the foreign currency (forex) market for traders. Although they are a relatively expensive way to trade forex compared with the leveraged spot forex trading offered by a growing number of brokers, the fact that the maximum potential loss is capped and known in advance is a major advantage of binary options. But first, what are binary options? They are options with a binary outcome, i. e., they either settle at a pre-determined value (generally $100) or $0. This settlement value depends on whether the price of the asset underlying the binary option is trading above or below the strike price by expiration. Binary options can be used to speculate on the outcomes of various situations, such as will the S&P 500 rise above a certain level by tomorrow or next week, will this week’s jobless claims be higher than the market expects, or will the euro or yen decline against the US dollar today? Say gold is trading at $1,195 per troy ounce currently and you are confident that it will be trading above $1,200 later that day. Assume you can buy a binary option on gold trading at or above $1,200 by that day’s close, and this option is trading at $57 (bid)$60 (offer). You buy the option at $60. If gold closes at or above $1,200, as you had expected, your payout will be $100, which means that your gross gain (before commissions) is $40 or 66.7%. On the other hand, if gold closes below $1,200, you would lose your $60 investment, for a 100% loss.

Buyers and Sellers of Binary Options. For the buyer of a binary option, the cost of the option is the price at which the option is trading. For the seller of a binary option, the cost is the difference between 100 and the option price and 100. From the buyer’s perspective, the price of a binary option can be regarded as the probability that the trade will be successful. Therefore, the higher the binary option price, the greater the perceived probability of the asset price rising above the strike. From the seller’s perspective, the probability is 100 minus the option price. All binary option contracts are fully collateralized, which means that both sides of a specific contract – the buyer and seller – have to put up capital for their side of the trade. So if a contract is trading at 35, the buyer pays $35, and the seller pays $65 ($100 - $35). This is the maximum risk of the buyer and seller, and equals $100 in all cases. Thus the risk-reward profile for the buyer and seller in this instance can be stated as follows: Buyer – Maximum risk = $35. Maximum reward = $65 ($100 - $35) Seller – Maximum risk = $65. Maximum reward = $35 ($100 - $65) Binary options on forex are available from exchanges like Nadex, which offers them on the most popular pairs such as USD-CAD, EUR-USD and USD-JPY, as well as on a number of other widely traded currency pairs. These options are offered with expirations ranging from intraday to daily and weekly. The tick size on spot forex binaries from Nadex is 1, and the tick value is $1. The intraday forex binary options offered by Nadex expire hourly, while the daily ones expire at certain set times throughout the day.

The weekly binary options expire at 3 p. m. on Friday. In the frenetic world of forex, how is the expiration value calculated? For forex contracts, Nadex takes the midpoint prices of the last 25 trades in the forex market, eliminates the highest five and lowest five prices, and then takes the arithmetic average of the remaining 15 prices. From December 15, 2014, for forex contracts, Nadex has proposed to take the last 10 midpoint prices in the underlying market, remove the highest three and lowest three prices, and take the arithmetic average of the remaining four prices. Let’s use the EUR-USD currency pair to demonstrate how binary options can be used to trade forex. We use a weekly option that will expire at 3 p. m. on Friday, or four days from now. Assume the current exchange rate is EUR 1 = USD 1.2440. Consider the following two scenarios: (a) You believe the euro is unlikely to weaken by Friday, and should stay above 1.2425. The binary option EURUSD>1.2425 is quoted at 49.0055.00. You buy 10 contracts for a total of $550 (excluding commissions). At 3 p. m. on Friday, the euro is trading at USD 1.2450. Your binary option settles at 100, giving you a payout of $1,000.

Your gross gain (before taking commissions into account) is $450, or approximately 82%. However, if the euro had closed below 1.2425, you would lose your entire $550 investment, for a 100% loss. (b) You are bearish on the euro and believe it could decline by Friday, say to USD 1.2375. The binary option EURUSD>1.2375 is quoted at 60.0066.00. Since you are bearish on the euro, you would sell this option. Your initial cost to sell each binary option contract is therefore $40 ($100 - $60). Assume you sell 10 contracts, and receive a total of $400. At 3 p. m. on Friday, let’s say the euro is trading at 1.2400. Since the euro closed above the strike price of $1.2375 by expiration, you would lose the full $400 or 100% of your investment. What if the euro had closed below 1.2375, as you had expected? In that case, the contract would settle at $100, and you would receive a total of $1,000 for your 10 contracts, for a gain of $600 or 150%. Additional Basic Strategies. You do not have to wait until contract expiration to realize a gain on your binary option contract. For instance, if by Thursday, assume the euro is trading in the spot market at 1.2455, but you are concerned about the possibility of a decline in the currency if US economic data to be released on Friday are very positive. Your binary option contract (EURUSD>1.2425), which was quoted at 49.0055.00 at the time of your purchase is now at 7580. You therefore sell the 10 option contracts you had purchased at $55 each, for $75, and book a total profit of $200 or 36%. You can also put on a combination trade for lower risklower reward.

Let’s consider the USDJPY binary option to illustrate. Assume your view is that volatility in the yen – which is trading at 118.50 to the dollar – could increase significantly, and it could trade above 119.75 or decline below 117.25 by Friday. You therefore buy 10 binary option contracts – USDJPY>119.75, trading at 29.5035.50 – and also sell 10 binary option contracts – USDJPY>117.25, trading at 66.5072.00. Therefore, you pay $35.50 to buy the USDJPY>119.75 contract, and $33.50 (i. e., $100 - $66.50) to sell the USDJPY>117.25 contract. Your total cost is thus $690 ($355 + $335). Three possible scenarios arise by option expiration at 3 p. m. on Friday: The yen is trading above 119.75 : In this case, the USDJPY>119.75 contract has a payout of $100, while the USDJPY>117.25 contract expires worthless. Your total payout is $1,000, for a gain of $310 or about 45%. The yen is trading below 117.25 : In this case, the USDJPY>117.25 contract has a payout of $100, while the USDJPY>119.75 contract expires worthless. Your total payout is $1,000, for a gain of $310 or about 45%. The yen is trading between 117.25 and 119.75 : In this case, both contracts expire worthless and you loss the full $690 investment. Binary options have a couple of drawbacks: the upside or total reward is limited even if the asset price spikes up, and a binary option is a derivative product with a finite time to expiration. On the other hand, binary options have a number of advantages that make them especially useful in the volatile world of forex: the risk is limited (even if the asset prices spikes up), collateral required is quite low, and they can be used even in flat markets that are not volatile. These advantages make forex binary options worthy of consideration for the experienced trader who is looking to trade currencies. Binary Option Value - Binary Value Ratings.

Welcome to BinaryValue. com. The Place to Learn & Trade Binary Options.. Find Updated Reviews about Option Brokers.. and Read them like a Business Card. Find Ratings using our Unique Brokers Formula.. Find News and the Latest Tradng Promotions from Binary Option Brokers. Welcome to Binary Options Home. Welcome to Binary Value. Welcome to BinaryValue. com. The Place to Learn & Trade Binary Options.. Find Updated Reviews about Option Brokers.. and Read them like a Business Card.

Find Ratings using our Unique Brokers Formula.. Find News and the Latest Tradng Promotions from Binary Option Brokers. Welcome to BinaryValue. com. The place to review, rate and learn about Binary Option Brokers.. Binary Options Rating Formula v.3.5. The introduction of the Rating Formula v.3.5 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. Until today, brokerage services were rated by individual users. But most of these user ratings in the trading industry are not honest. Anyone who has an incentive to do so, may produce a fake rating review. Prove comes from the fact that most individual user ratings are given extreme values such is 1010 or 110. It is hard to believe that these extreme ratings have been produced by honest users. This is why the Rating Formula Series was designed in the first place. 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. The first and the second versions of the Rating Broker Formula were applied on Online Forex Brokers. The version 3.0 of the formula was applied on Binary Option Brokers. More information here: World Brokers Rating Formula V.3.5. -Implemented on Binary Options Brokers. The rating formula v.3.5 is built by linking together four major trading factors : 2) Min Commissions and Fees Charged. 3) Max Number of Trading Options. 4) Max Technological Efficiency. Maybe someday in the future, world regulatory authorities will use a similar formula to control and to force online brokers to operate in a way favor to their clients. Furthermore, regulators will be able to force online brokers to act in the direction of minimizing the whole systemic risk of the industry. Scam brokers are not just harming traders, but they are also adding an extreme level of systemic risk into the trading industry.

The same way that we have wiitness the great financial crisis of 2008 in the US, which eventually became a world crisis. The rating formula is designed to help traders but also to help the system to reduce the incorporated level of systemic risk. That is why we believe that this way of rating brokers sooner or later will become an industry standard. FACTOR 1) Safety of Funds, Weight 25% When trading online, ensuring the safety of your funds becomes a major issue. Financial companies of all types (investment companies, brokerages etc) tend to accept more risk than they can really afford in order to leverage their profit potential. That is 100% against the interest of their clients who are by nature risk-averse concerning the safety of their funds. In order to measure brokerage credibility a number of rating factors where identified and applied to the rating formula 3.5. Table-1 : Safety of Funds Analysis. 1.1 Headquarters Base, The country where a binary option broker maintains headquarters determines in a certain extend the quality and consistency of its balance sheet. Fees and penalties imposed by supervising authorities provide a strong incentive for Options Brokers to operate legitimately without risking their client funds. That is why the Rating Formula takes in a strong consideration the country of the broker's headquarters. General Offshore = 0.0%, British Virginia Islands = 3.0%, Cyprus = 6.0%, Ireland, Australia = 8%, USA, UK, Germany, France, Switzerland = 10.0% 1.2 Years in the Market, Many years in the market indicate that a Binary Option Company operates under a successful business model and that it is proven capable of managing the whole enterprising risk over time. Binary Options where introduced in 2008, so the Formula weights a maximum rating of 8% on the brokers who were found in 2008. 0-1 Years = 0.0%, 1-3 Years = 4.0%, 3-5 Years = 6.0%, 5+ Years = 8.0% When you are spreading your personal information throughout the internet you must be sure that these important information will stay secure away from fraud.

The way a Broker encrypts your information using SSL technology is absolutely important. Platform SSL Encryption 128 bit = 3.0%, 256 bit = 4.0%, No SSL Encryption = 0% 1.4 Customer Service Support Quality. The importance of a good customer service support is obvious. The quick and the reliable respond of a broker to a trader's demand means money for the trader. Time is money when trading derivatives. Traders and brokers are very far away to its other in a geographical level so it is important that they stay close in an online level. 247 Customer Service = 1.0%, 246 Customer Service = 0.5%, 245 Customer Service = 0%, eMail Support = +1.0%, Phone Support = +1.0%. Live Chat Support = +1.0%, Skype Support = +1.0% The following ratings are made in order to adjust results. Note that in any case the maximum value of Factor-1 rating is 25.0%. As the Binary Options Trading is very young industry born in 2008, regulation is not yet an industry standard. Lately, some Binary Options Brokers have managed to apply for regulation and that is why this factor is also incorporated to our ratings. An extra rating (up to 5%) is added to those Binary Options Brokers who are supervised by a trusty regulatory authority. If a broker is regulated by two or more authorities the rating outcome is the summary of all the individual authority ratings. FSC (BVI) = +1.0%, = +3.0%, CBI = +4.0%, ASIC = +4.0%, BaFIN = +5.0%, FSA (UK) = +5.0%, FINMA = +5.0% The acceptance of US residents indicates compatibility with US regulation, which after 2008 became strict for financial companies. US regulation adds credibility to a Binary Option Broker operation.

Yes = +2.0% or No = +0% FACTOR 2) Competition, Weight 40% The level of competition in the Binary Option Industry is very crucial for traders. High payout and refund rate determines in a high extend the success of trading Binary Options online. Table-2 : Competition Analysis. 2.1 Trading Bonus. The higher the bonus offered by a binary option broker, the larger are the trader’s available funds. Of course you should notice that in order to receive a bonus you must create trading volumes up to 20 times or more the value of the bonus. This factor will maybe be incorporated to future versions. 2.2 Deposit Withdrawal Commissions, Deposit and Withdrawal commissions are progressively reducing trading funds, so the factor 2.2 is incorporated in our ratings. Binary Option Brokers who are not charging any commissions are rated beneficially by 2.0% compared to other brokers who are charging commissions and fees. If a broker provides its clients with one single free withdrawal per month then he receives a rating of 1.0%. Yes = 0 or No = 2.0%, One Free Withdrawal per month = 1.0% 2.3 Highest Payout Rate, The Payout Rate is by far the most important factor when trading binary options. Eventually, factors 2.3 and 2.4 are weighed 30%. The maximum payout rate of each binary options broker is weighed 20%. In order to calculate it we divide the actual payout rate by 10 and after we multiple the result by 2. Forex example for a payout of 85% a broker will earn 17.0% rating.

Max Payout Rating = (Max Payout Rate) x 2> 10. 2.4 Average Payout Rate, The Average Payout Rate is reflecting the broker's general ability to compete. In our ratings we value more the highest payout rate and not the average payout rate. That is because a trader that will open multiple trading accounts will take advantage the highest and not the average payout rate. Average Payout Rating = (Average Payout Rate) 10. The following rating is made in order to adjust results. Note that in any case the maximum value of Payout Factor is 30.0%. The rate of Refund adds extra value to the profit potential of each Binary Option Trader, so factor 2.5 may add up to 5% in the overall rating of any Binary Option Broker. FACTOR 3) Trading Options, Weight 25% Every trader has a different profile with different needs so the quantity and the quality of trading options are highly weighed in our ratings. The number of trading assets offered by the Binary Option Broker is certainly the most crucial factor but other trading options are rated too, like the number of Deposit and Withdrawal methods and the availability of a Demo Account. Table-3 : Trading Options. 3.1 Available Number of Currency Pairs, Forex trading, and especially the EURUSD pair, is very popular among traders nowadays. The higher the number of Forex pairs available, the higher the potential for traders to exploit trading opportunities. The calculation is made simple and fair by dividing the total number of availbale currencies by 100, given a maximum number of 40 currencies which weight a maximum 4.0% in rating value. (Number of Currencies 10) %, max=40 Currencies. 3.2 Available Number of World Stocks.

Trading Stocks & Indices is widely used among Binary Option Traders. Especially as concerns shares of companies like Apple, Facebook and Google. The calculation is made by dividing the total number of availbale shares by 100, given a maximum number of 40 shares which weight a maximum 4.0% in rating value. (Number of Stocks 100) %, max=40 Stocks. 3.3 Available Number of Indices. Trading world indices like Nasdaq and Dax is sometimes the best way to accumualte your trading instict. The calculation is made by dividing the total number of availbale indices by 50, given a maximum number of 20 indices which weight a maximum 4.0% in rating value. (Number of Indices 50) %, max=20 indices. 3.4 Gold & Metal Trading. Trading metals like Gold and Silver is became very popular the last decade. As concerns gold, the existence of gold-based assets in a portfolio reduces the overall risk and constitute a way of differentiating long-term portfolio value. That is why gold trading receives individual rating 2.0%. The availability of more metals receives extra rating of 1% per metal. Gold Trading = 2.0%, any other Metal = +1.0% Oil Trading Available Yes = 1.5%, No = 0% Oil Trading is very popular and receives 1.5% in tems of rating. 3.6 Commodities and Energy, This factor weighs the availability of more commodities than Energy and Metals .

This factor receives also a 1.5% rating. Commodity Trading Available = 1.5%, No = 0% The following factor adjust the results of the asset index . In any case the asset index rating can't exceed 18% in total rating. The reason for this adjustment is to rate brokers that are highly specialized in trading a particular type of assets. For example a binary option broker who is specialized in trading Forex and provides more than 60 pairs will not take only a 4% rating but also a +1.5% rating. If Trading more than 50 assets = +1.5% and if more than 100 assets = +3.0% 3.8 Demo Practice Account Availability. The existence of a practice demo account adds value to the trader that wants to deposit funds for the first time. Time and money may be saved using the demo account before starting a new real trading account. Demo Account Yes = 3.0% or No = 0% 3.9 Deposit Methods, Wide variety of Deposit Methods means a broker is willing to become more suitable to his customers needs. For each deposit method available = 0.5%, max = 4 methods. 3.10 Withdrawal Methods, The wide variety of withdrawing methods is of equal importance. For each deposit method available = 0.5%, max = 4 methods. FACTOR 4) Technology & Innovation, Weight 10% Technological efficiency is very important when trading online. Table-4 : Technology and Innovation.

The most common way to trade binary options. Yes = 2.0% or No = 0% 4.2 One Touch Binary Options. One Touch Binary Options which are also known as boundary options provide traders with the ability to early capitalize their gaining. One-Touch Binary Options earn a payout if an asset reaches a targeted price even before the predefined expiration. Yes = 2.0% or No = 0% 4.3 Rollover Feature Availability. Rollover provides traders the ability to widen their trading time frame. Rollover actually allows a trade expiration to be postponed and therefore constitute an advantage for binary options traders. Yes = 1.5% or No = 0% 4.4 Early Trade Closure. The ability of early closing simple trades is very important. Yes = 1.5% or No = 0% 4.5 Mobile Trading. Mobile trading is not just a trend nowadays, it is simply the future of trading. Every mobile device that is supported means that more traders will able to execute trades anywhere and anytime.

iPhone=1.5%, Android=1.5%, Any other Device = +1.0% (iPad, Windows Mobile, Blackberry) Total Rating: By adding the 4 parts of the rating formula, we get the Total Rating of each Binary Option Broker. Quality and Quantity of Trading Options Offered (25.0%) + The First Ratings using version 3.5. The version 3.5 of the Rating Formula is certainly the most precise and the most complete version of all previous. Binary Value Rating Brokers Formula v.3.0 (2012-2013) Rating Formula Mission. Maybe someday in the near future, world regulatory authorities will use a similar formula to control and to force online brokers to operate in a way favor to their clients. Regulators will be able to force brokers to act in the direction of minimizing the whole systemic risk of the industry. Scam brokers are not just harming traders, but they are also adding an extreme level of systemic risk into the trading industry. The First Ratings using version 3.5. Review Binary Option Signals. Trading World Markets. Using Binary Options you may trade any market on any direction.. The Latest News & Promotions.

Find the Latest News and get the Best Promotions.. Binary Options Directory. Compare Binary Options Pros: Binary Option Reviews. Review Binary Option Brokers like reading their Business Card. Find information about the Company, Trading Terms and Account Information.. Option Broker Ratings. Broker Ratings based on our unique Formula v.3.5 which combines: Safety of Funds, Competition, Trading Options and Technology.. Compare Binary Brokers. Binary Option Reviews. Review Binary Option Brokers and learn all aspects of their trading conditions before opening a new account.. Brokers Directory. Find a list of Options Brokers around the world with their basic information and rating.. A Guide to Trading Binary Options in the U. S. Binary options are based on a simple yes or no proposition: Will an underlying asset be above a certain price at a certain time?

Traders place trades based on whether they believe the answer is yes or no, making it one of the simplest financial assets to trade. This simplicity has resulted in broad appeal amongst traders and newcomers to the financial markets. As simple as it may seem, traders should fully understand how binary options work, what markets and time frames they can trade with binary options, advantages and disadvantages of these products, and which companies are legally authorized to provide binary options to U. S. residents. Binary options traded outside the U. S. are typically structured differently than binaries available on U. S. exchanges. When considering speculating or hedging, binary options are an alternative, but only if the trader fully understands the two potential outcomes of these exotic options. (For related reading, see What You Need To Know About Binary Options Outside The U. S. ) U. S. Binary Options Explained. Binary options provide a way to trade markets with capped risk and capped profit potential, based on a 'yes' or 'no' proposition. For 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 think gold will be below $1,250 at 1:30 p. m., then you sell this binary option. The price of a binary option is always between $0 and $100, and just like other financial markets, there is a bid and ask price. The above binary may be trading at $42.50 (bid) and $44.50 (offer) at 1 p. m. If you buy the binary option right then you will pay $44.50, if you decide to sell right then you'll sell at $42.50. Let's assume you decide to buy at $44.50. If at 1:30 p. m. the the price of gold is above $1,250, your option expires and it becomes worth $100. You make a profit of $100 - $44.50 = $55.50 (less fees).

This is called being in the money. But if the price of gold is below $1,250 at 1:30 p. m., the option expires at $0. Therefore you lose the $44.50 invested. This called out of the money. The bid and offer fluctuate until the option expires. You can close your position at any time before expiry to lock in a profit or a reduce a loss (compared to letting it expire out of the money). Eventually every option settles at $100 or $0 $100 if the binary option proposition is true, and $0 if it turns out to be false. Thus each binary option has a total value potential of $100, and it is a zero-sum game – what you make someone else loses, and what you lose someone else makes. Each trader must put up the capital for their side of the trade. In the examples above, you purchased an option at $44.50, and someone sold you that option. Your maximum risk is $44.50 if the option settles at $0, therefore the trade costs you $44.50. The person who sold to you has a maximum risk of $55.50 if the option settles at $100 ($100 - $44.50 = $55.50). A trader may purchase multiple contracts, if desired.

Another example: NASDAQ US Tech 100 index > $3,784 (11 a. m.). The current bid and offer is $74.00 and $80.00, respectively. If you think the index will be above $3,784 at 11 a. m., you buy the binary option at $80 (or place a bid at a lower price and hope someone sells to you at that price). If you the think the index will be below $3,784 at that time, you sell at $74.00 (or place an offer above that price and hope someone buys it from you). You decide to sell at $74.00, believing the index is going to fall below $3,784 (called the strike price) by 11 a. m. And if you really like the trade, you can sell (or buy) multiple contracts. Figure 1 shows a trade to sell five contracts (size) at $74.00. The Nadex platform automatically calculates your maximum loss and gain when you create an order, called a ticket. Nadex Trade Ticket with Max Profit and Max Loss (Figure 1) The maximum profit on this ticket is $370 ($74 x 5 = $370), and the maximum loss is $130 ($100 - $74 = $26 x 5 = $130) based on five contracts and a sell price of $74.00. (For more on this topic, see Introduction To Binary Options. ) How the Bid and Ask are Determined. The bid and ask are determined by traders themselves as they assess the probability of the proposition being true or not. In simple terms, if the bid and ask on a binary option are at 85 and 89, respectively, then traders are assuming a very high probability that the outcome of the binary option will be yes, and option will expire worth $100. If the bid and ask are near 50, traders are unsure if the binary will expire at $0 or $100 – it's even odds. If the bid and ask are at 10 and 15, respectively, that indicates traders think there is a high likelihood the option outcome will be no, and expire worth $0. The buyers in this area are willing take the small risk for a big gain. While those selling are willing to take a small – but very likely – profit for a large risk (relative to their gain).

Where to Trade Binary Options. Binary options trade on the Nadex exchange, the first legal U. S. exchange focused on binary options. Nadex provides its own browser-based binary options trading platform which traders can access via demo account or live account. The trading platform provides real-time charts along with direct market access to current binary option prices. Binary options are also available through the Chicago Board Options Exchange (CBOE). Anyone with an options-approved brokerage account can trade CBOE binary options through their traditional trading account. Not all brokers provide binary options trading, however. Each Nadex contract traded costs $0.90 to enter and $0.90 to exit. The fee is capped at $9, so purchasing 15 lots will still only cost $9 to enter and $9 to exit. If you hold your trade until settlement and finish in the money, the fee to exit is assessed to you at expiry. If you hold the trade until settlement, but finish out of the money, no trade fee to exit is assessed. CBOE binary options are traded through various option brokers each charge their own commission fee.

Pick Your Binary Market. Multiple asset classes are tradable via binary option. Nadex offers trading in major indices such as the Dow 30 (Wall Street 30), the S&P 500 (US 500), Nasdaq 100 (US TECH 100) and Russell 2000 (US Smallcap 2000). Global indices for the United Kingdom (FTSE 100), Germany (Germany 30) and Japan (Japan 225) are also available. Trades can be placed on forex pairs: EURUSD, GBPUSD, USDJPY, EURJPY, AUDUSD, USDCAD, GBPJPY, USDCHF, EURGBP, as well as AUDJPY. Nadex offers commodity binary options related to the price of crude oil, natural gas, gold, silver, copper, corn and soybeans. Trading news events is also possible with event binary options. Buy or sell options based on whether the Federal Reserve will increase or decrease rates, or whether jobless claims and nonfarm payrolls will come in above or below consensus estimates. (For more on this topic, see Exotic Options: A Getaway From Ordinary Trading. ) The CBOE offers two binary options for trade. An S&P 500 Index option (BSZ) based on the the S&P 500 Index, and a Volatility Index option (BVZ) based on the CBOE Volatility Index (VIX).

Pick Your Time Frame. A trader may choose from Nadex binary options (in the above asset classes) that expire hourly, daily or weekly. Hourly options provide opportunity for day traders, even in quiet market conditions, to attain an established return if they are correct in choosing the direction of the market over that time frame. Daily options expire at the end of the trading day, and are useful for day traders or those looking to hedge other stock, forex or commodity holdings against that day's movements. Weekly options expire at the end of trading week, and are therefore traded by swing traders throughout the week, and also by day traders as the options' expiry approaches on Friday afternoon. Event-based contracts expire after the official news release associated with the event, and therefore all types of traders take positions well in advance of - and right up to - the expiry. Advantages and Disadvantages. Unlike the actual stock or forex markets where price gaps or slippage can occur, the risk on binary options is capped. It's not possible to lose more than the cost of the trade. Better-than-average returns are also possible in very quiet markets. If a stock index or forex pair is barely moving, it's hard to profit, but with a binary option the payout is known. If you buy a binary option at $20, it will either settle at $100 or $0, making you $80 on your $20 investment or losing you $20. This is a 4:1 reward to risk ratio, an opportunity which is unlikely to be found in the actual market underlying the binary option.

The flip side of this is that your gain is always capped. No matter how much the stock or forex pair moves in your favor, the most a binary option option can be worth is $100. Purchasing multiple options contracts is one way to potentially profit more from an expected price move. Since binary options are worth a maximum of $100, that makes them accessible to traders even with limited trading capital, as traditional stock day trading limits do not apply. Trading can begin with a $100 deposit at Nadex. Binary options are a derivative based on an underlying asset, which you do not own. Therefore, you're not entitled to voting rights or dividends that you'd be entitled to if you owned an actual stock.