BUYING AND SELLING BINARY OPTIONS

When you look at the different entry levels of a particular binary option, you may notice some similarities with a call option. As a binary buyer, you would expect the underlying market to be bullish. Binary at-the-money (market price close to actual price) will cost around $50.

Binary Options can also be used as a hedge, just like a standard put option. To sell a binary, you need to take the opposite view; you expect the underlying market to be bearish and think that the price will end at or below the entry-level at expiration. You sell a binary order at the trade price.

The big difference between a binary and a standard buy-and-sell contract is that the payout is either everything is nothing.

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