Binary Forex Option Trading – How to trade in currency pairs

Many traders think of the stock market when they hear about binary options. However, forex also gives retailers great opportunities to make some high returns. Binary Forex Option Trading allows you to limit the risk and see the profit in one hour. Here we will discuss what Forex binary options are, how they are used and what strategies you can use to make a profit.

Before we get into binary forex options trading we will start with a brief explanation about Forex. A global, decentralized over-the-counter currency transaction allows financial markets, forex, or foreign exchange markets, banks, and other institutions to easily buy and sell foreign currency. Financial centers around the world serve as business centers in a wide variety of buyers and sellers day and night except weekends. For example, it enables an American company to import goods from South Africa and pay in rand, even though its income is in dollars.

Currency exchange rates in Forex fluctuate according to the market (floating currency). The value of a currency increases if the market demand exceeds the available supply and decreases in the opposite situation. This is where binary forex options trading comes in – a new type of investment that allows the average person to be active in Forex. Binary Forex Options Trading through an online platform offers you a tool to buy call and put positions in major currency pairs such as US Dollar against Japanese Yen and US Dollar against Euro among many others.

Online binary forex options trading allows the average or amateur investor to trade in Forex with a small amount of capital but with the same high returns as any other method. Also, returns can be collected in just one hour. What you are doing with this type of trading is trying to predict that one currency in one pair will rise or fall against the other.

Let’s take a look at Forex Options Trading available on the online binary options trading platform – a leader and pioneer in this field. They offer trading in the following pairs:

  • Australian Dollar (AUD) / US Dollar (USD)
  • Euro (EUR) / British Pound (GBP)
  • Euro (EUR) / Japanese Yen (JPY)
  • British Pound (GBP) / Japanese Yen (JPY)
  • New Zealand Dollar (NZD) / US Dollar (USD)
  • Euro (EUR) / USD (USD)
  • US Dollar (USD) / British Pound (GBP)
  • US Dollar (USD) / Japanese Yen (JPY)
  • US Dollar (USD) / South African (RAND)
  • US Dollar (USD) / Canadian Dollar (CAD)
  • US Dollar (USD) / Swiss Franc (CHF)

Each Forex Options Trading currency pair has an expired level of accounting. See AUD / USD as an example. These currency pairs, like most, have hourly, day-to-day, weekend, and month-end expiration times. The expiration formula is the sum of ASK values ​​and BID values, divided by two [(ASK+BID)/2]. The result is rounded up if the fifth decimal number is 5 or more and rounded up if the last decimal number is 4 or less.

Suppose you have $ 2,000 in your binary options account and you have decided to trade forex options at AUD / USD. Let us use the current rate of 0.91721 and the return rate of 70% for this example. Earlier this week, you read that the AUD / USD fell from 0.9206 to 0.9145 and settled below 0.9170 after the Australian government released some disappointing growth figures.

So you predict that the AUD will continue to depreciate against the US dollar. You will buy a put option for $ 500 with the expiration of one hour. If your prediction is correct and the price falls at the end of the hour, even if it is 0.001 less than the strike price, you will collect $ 850 ($ 350 return and your initial investment). So in the end, a $ 500 trade can easily earn you $ 350 and you can repeat the same binary options trade several times a day.