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Concept

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 – simple and straightforward to understand
  • Predetermined payouts and risks – unlike a traditional vanilla option, the possible gain is binomial, predefined and works as "all-or-nothing"
  • Payouts - In-the-money contracts yield returns from 70% of the paid premium/contract size up to 90% for regular binaries and from 50% to 70% for Daily Stock Options and for Pair Binaries.
  • Payout/Refund trade-off - traders may select between a set of combinations for a better match to their risk tolerance or trading strategy
  • Variety of markets – the underlying instruments may be individual stocks, indices, Forex, commodities, etc.
  • Small trading amounts, low deposit required – binary options contracts/premium with Dukascopy Bank start from as low as USD 1
  • No commissions – Dukascopy Bank charges no fees in addition to the premium paid by the trader
  • Numerous strike prices and expiry dates – for call/put binary options the strike price is the price at the start of the option contract
Binary options offer a non-linear return and a way to gain up to 90% of the initial investment/premium if the contract terminates In-the-money.

Entering in binary options is speculative and involves the risk of losing your entire investment. You should only trade money you can afford to lose entirely.