Everything You Need to Know about Binaries before Trading Them

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A few years ago, I had the opportunity to travel to China and discuss the Foreign Currency Exchange (Forex) Markets…

This conference was large and filled with people from all over to discuss one of the fastest moving markets in the world.

Now I met plenty of people – all with great ideas, opinions, and questions.

But one question continued to resurface and stood out from the others.

What about binary options?

In fact, this is one of the most common questions I’ve gotten over the past 30 years.

So here’s the deal

Here’s What You Should Know About Binary Options

Like every day options, binaries are fixed contract of price and time – but they come with one big difference…

They have no time value.

They simply follow a yes or no question:

Will a certain market be above a certain price at a certain time?

If you think the answer “yes,” then you would buy the binary option.

If you think the answer is “no,” you would sell the binary option.

Regardless of the outcome, someone will win and someone will lose.

Whatever you pay is your maximum risk. You can’t lose any more.

You have to hold the option to expiration and if you’re right, you get the full amount you invested to be right and your profit is the amount minus your purchase price.

If your wrong, you lose the full amount you invested.

And that’s basically how binary options work…

Pretty simple right?

Or so they want you to think…

Beware of the Purchase Price

Think about the outcome of a binary option like the roll of a dice…

Once you buy or sell a binary, you wait for the outcome. There is no option to sell it to someone else – hence why there is no time value.

Either you win or you lose. You know your potential winnings – and losses – from the get go.

And even though you bet up or down, it’s still a limited reward and limited risk outcome.

But here’s the catch, the purchase price.

To get into a binary option trade, you have to pay a certain amount to a binary option dealer to create the trade for you. I like to call this a VIG – which may sound familiar because there is a very similar bet in Vegas.

While in Vegas, there’s always a small amount of money you pay to the “house” to take the bet, and it’s the same with binary options.

And while at the time, it may not seem like a large amount, when you step back and do the math, you’ll realize it’s much larger than you realized.

The Average “VIG” on binary options is anywhere from 5-10%. That’s right, every 5-10% of a binary option trade goes to the house. So, if we’re speaking mathematically, you have to be right 55-60% of the time just to break even.

As you know, I’m all about the numbers — these just don’t cut it for me, and I’m guessing they don’t work for you either. But I know a way to succeed in the FOREX with the odds on your side….

How To Profit in the World’s Fastest Moving Markets

You don’t have to roll the dice to be successful in the FOREX.

You don’t have to eye the markets 24/7 or be a veteran currency trader speculate the next big move for currencies.

And you can do this by utilizing PowerShares’ “CurrencyShares” exchange-traded funds (ETFs).

“Currencyshares” can easily be found on the New York Stock Exchange (NYSE) – and they keep it pretty simple as every exchange-traded product is constituted to closely track the spot currency, and nearly every major currency is available against the US dollar.

Here are the top currency ETFs

You see, these ETFs are like most standard ETFS but they track currencies. You can buy and sell these in units, just like shares of a stock, right from a brokerage account.

By buying one of the shares means that you are expecting the foreign currency above to rise against the U.S. Dollar.

Conversely, shorting a specific CurrencyShare means that you’re expecting the US dollar to rise against whatever currency the ETF tracks.

CurrencyShares offer the traditional option style as well.

That means one contract controls 100 shares of the ETF. And just like an equity option it comes with strikes and expiration dates which can be entered and exited anytime until expiration.

The example above is an option play on Guggenheim CurrencyShares Euro Trust (FXE).

The FXE May 18 2018 $118 calls were trading between $1.24 and $1.31 at the time. That’s a full $0.07 cent difference between the bid and ask – that difference offers us much better slippage than binary options with much more flexibility.

So which option is right for you? That answer is different for everyone. Some people enjoy the security and regulation of the NYSE while other enjoy the thrill of the yes/no game you play with Binary options.

But whatever way you choose to trade the global currency markets-stick to your strategy, trust your plan, and go get your profits.

Now, I’m always receiving questions from my Power Profit Trades readers about which strategy is the best to use right now.

So I’ve compiled all of the incredible profit-packed methods I use day in and day out into what I call the Million Dollar Masterclass. It’s just one of the many components members of my new Fast Fortune Club receive.

Each masterclass covers a new trading strategy, secret, or technique… and as the name suggests, each could make you a millionaire. Plus, they incorporate live trading demonstrations and a virtual step-by-step walkthrough of each play. It’s like you’re looking right over my shoulder.

The next class takes place on Monday… where I’ll be showing my Fast Fortune Club members how they could double their money on the world’s most expensive companies, and the exact trade instructions that could hand them 200% gains.

I encourage each of my Power Profit Trades readers to check it out. You can find the details right here.

Plus, in this incredible footage, I’ll give you a sneak-peak of what the Fast Fortune Club is all about – and reveal a lucrative method that lets you become thousands of dollars richer in a matter of seconds.

Click here now to see how it works.

Tom Gentile
America’s #1 Pattern Trader

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