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Binary option contracts offer defined risk and clear outcomes. This makes it easier for you when deciding whether to trade, as you know exactly how much you could lose if the markets move against you. What is a binary option?
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Binary options depend on the outcome of a "yes or no" proposition, hence the name "binary. At the time of expiry, the price of the underlying asset must be on the correct side of the strike price based on the trade taken for the trader to make a profit. A binary option automatically exercisesmeaning the gain or loss on the trade is automatically credited or debited to the trader's account when the option expires. That means the buyer of a binary option will either receive a payout or lose their entire investment in the trade--there is nothing in between.
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Binary options traded outside the U. These include trading applications with names that often imply an easy path to riches. Traders profit from price fluctuations in multiple global markets using binary options, though those traded outside the U.
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What is the Best Binary Options Broker? Binary options trading hinges on a simple question — will the underlying asset be above or below a certain price at a specified time? If so, you can make substantial profits with one of the most straightforward financial instruments to trade. But what exactly are binary options, and what are their benefits and drawbacks?
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