THE COMPLETE Binary Trading Guide

Transcription

1 THE COMPLETE Binary Trading Guide 1

2 TABLE OF CONTENTS: ebook - Introduction 03 About Opteck What Are Binaries? Registration Deposits Withdrawals The Trading Process Types of Trades Quick Option High/Low One Touch Range High\Low open a trade Frequently Asked Questions (FAQ) Glossary What Does it Take to Become a Profitable Trader?

3 ebook Introduction The complete binary trading guide was written by our top market experts in order to fit all levels of expertise. You will find it helpful regardless if you're a beginner or an experienced investor. This guide's purpose is to provide you with the most extensive introduction to the world of binary trading, including a breakdown of all the various tools and features presented in our patented trading platform. We advise you to sit back, relax and read this guide before you start trading on the platform. This way, as you familiarize yourself with all the tools, features and terms, it would become much easier and simpler for you to focus on sharpening your trading skills. We hope you enjoy this ebook and get the competitive edge you need to succeed. We wish you successful trading! 3

4 About Opteck Since 2011, our team of industry professionals has been constantly providing both beginners and advanced traders worldwide with an innovative and user-friendly trading experience. In a world filled with financial institutions and investment choices, we strive to provide an alternative that is as simple as it is unique;to create a seamless and unmediated environment, where EVERYONE can trade and earn. Opteck is a fully licensed and regulated broker that provides you with the security and protection you need to invest with complete confidence. 4

5 EDUCATIONAL INFRASTRUCTURE Our educational materials allow even the most inexperienced of traders the ability to understand the financial markets efficiently, quickly and successfully. Our industry professionals assembled a collection of ebooks, video courses and webinars exclusively designed to implement on our platform. Our personal account managers are available for 1-on-1 strategy sessions that will take your training process one step further. Opteck Customer Support We exist to serve customers whenever they need it, wherever they are. We believe in listening, understanding expectations and working around the clock to exceed them. Our multilingual 24/7 customer support is accessible via phone, chat or . 24h From the first call, to your personal account management, our world-class service accompanies and assists your every step of the way. 5

6 Our Platform Creating products that are as elegant and stylish as they are easy to use is how we implement quality and simplicity across-the-board. Opteck's trading platform was patented by us after years of market research, and is designed with you, the trader, in mind. Available for desktop and mobile, its advanced interface is packed with all the latest features and live-streamed market info that will take your trading to the next level. Transparency and trustworthiness We know we succeed only when our customers succeed. We do business in an open, direct and sustainable way, and communicate problems as honestly as we do achievements. It's easier to solve them this way. The asset market prices we showcase in our platform are live streamed from several market data providers, allowing you to implement financial news and fundamental analysis in real time. Opteck presents a single Option rate for Call and Put to avoid any additional market fees. 6

7 What are Binaries? Binaries are a simple tool for people to trade financial assets online. To fully understand the simplistic beauty of binary trading, let us first take a look at how investments in other trading markets work. In the traditional form of investment, the investor essentially purchases an underlying financial asset. From the moment of purchase, the investor is belted to that financial asset, whether it s profitable or fruitless. If the investor sells at a time when the financial asset has increased its value, he will make a profit. Alternatively, if they sell when the financial asset has decreased in its value, he ll lose his money. This type of investment compels the investor to constantly worry about when to sell. Binary trading is much simpler. In binaries, you trade ON the market, not IN the market. Unlike traditional trading, when investing in binaries you are not putting at risk the entirety of your capital, since you are not buying the financial asset, only predicting its movement. 7

8 How to Trade Binaries In its literal translation, the word binary is defined as having two parts. In binary trading, there are only two possible outcomes for an investment, either Call (UP) or Put (DOWN). If the price of your financial asset increases, this type of investment is called CALL (UP). And if the market price of your chosen financial asset decreases, this type of investment is called PUT (DOWN). All in all, trading binaries is as simple and easy as it gets, and it only takes 4 steps to initiate a trade; step 1, you select a financial asset, step 2, you choose a direction (UP or DOWN), step 3, you enter the amount of money you wish to invest, and step 4 is the step in which you collect your profits. For example: You were looking to make an investment and decided to trade Gold. Obviously, the more familiar you are with the Gold market, the better your chances are of successfully predicting the fluctuations in the price of Gold. When you open your Gold position, its price is 1, You then predict that this price will increase (UP) between now and the expiry time (from 60 seconds up to 3 months). Remember, it doesn't matter by how much the price will increase, as long as it increases. Your last decision requires you to simply determine how much money to invest in this trade. So if you traded on Gold and invested $250, with a payout potential of 86%, your pure profit is $215. An additional perk of binary options is that the amount of investment needed is much lower than an average required investment in other trading forms in order for you to gain a noticeable profit. 8

9 What are the Risks? When trading binaries, there are only 2 possible outcomes: either you end up "in-themoney" or "out-of-the-money". It s that simple. Furthermore, what makes binaries such an ingenious form of trading, is that you predetermine how much to invest before you open a position. Basically, you re in control of your invested capital at all times, and what you stand to lose or gain is set forth from the very beginning. Now that you gained an understanding of the basic principles of binaries, let us help you get started in building your trading portfolio. 9

10 REGISTRATION To get started with binary trading you will first need to open your trading account. As a part of the registration process, you ll be asked to fill in your personal details. Please make sure not to miss any of the required fields. Simply follow the steps below to complete your registration: 10

11 OPENING A TRADING ACCOUNT From the home page on our website: 1. Click the Open Account link, located on top of the page. 2. Fill in the Join Us Now form and press the Sign Up button. You will then get an with your credentials (username and password) and an exclusive welcome package. 11

12 DEPOSITS The process of funding your trading account is quick and simple. Deposits can be made via the trading platform or with the assistance of an account manager. To fund your account you will first need to log in, then click the "Deposit" button located on the right-hand side. 12

13 Deposit Page In stage 1 of the deposit page, you will be asked to enter your billing information and in stage 2, to select a payment method and enter your payment information (from the provided options). Please enter the required billing and payment information and press on the "Deposit" button. Please note: Client s account balance must be sufficient to cover all opened trading positions at all times. Opteck accepts a variety of payment methods, including Visa, MasterCard, Neteller, Skrill, Western Union, PaySafe, CashU and Bank Wire Transfers. 13

14 WITHDRAWALS We offer ultra-fast and 100% secure withdrawals. For your convenience, we allow a broad range of currencies and a wide selection of withdrawal methods, such as bank wire, credit cards and more. All withdrawals are processed and approved within 3-5 business days from the time the request was issued. 14

15 Withdrawing Funds: To withdraw funds from your account, go to the Trading Room and click the Withdrawal link under the Deposit button, located on the right side. Withdraw Funds Page: Fill in the amount of money you wish to withdraw and click Witdraw. An account manager will contact you to finalize your request. Please note: in order to withdraw funds, you must first verify your account. 15

16 THE TRADING PROCESS 16

17 After opening an account and placing a deposit, you can get started with building your strong and diverse trading portfolio. Below you will find a step-by-step detailed description of the trading process. The Financial asset First, you select a financial asset to trade with. The Opteck platform offers over 1,000 assets from 4 major financial markets (currencies, stocks, commodities and indices). The Investment Next, you decide on the amount you wish to invest. As an Opteck trader, you ll receive valuable information describing money management and risk reduction in order to ensure you d be able to establish a considerable investment based on your account s liquidity. 17

18 The Direction Lastly, you choose the direction of the asset's market price. If you think the financial asset's price will rise, choose the Call (UP) option, and if you think the financial asset s market price is about to drop, choose the Put (DOWN) option. Once you have completed these steps, the trading process is finalized. You can relax and wait for the expiration of your trade to conclude whether your prediction was profitable. 18

19 TYPES OF TRADES Opteck offers a variety of tools for trading binaries. Each tool has its own unique benefits and together, they form a well-rounded, diverse trading portfolio. 19

20 QUICK OPTION The Quick Option trading type lets you decide whether the market price will close higher or lower than the current price in short time periods, between 60 seconds and 60 minutes. This trading type fits volatile markets and can yield high profits when used wisely. In a Call (UP) option (predicting an uptrend), the price of the financial asset must stay higher than the striking price by the end of the option s time frame. In a Put (DOWN) option (predicting a downtrend), the price needs to stay below the striking price by the end of the option s time frame. 20

21 Asset Navigation Type of Option Market Asset Information Asset Time of expiry The payout percentage Choose a Call (UP) Option Choose a Put (Down) Option The Strike Price 21

22 Asset Chart Information Asset The payout percentage The gray area indicates the asset price recent behavior Option expiry time The Current market rate Investment amount box Up (Call) OR DOWN (put) button The white area presents the range in which the trader can open the position, increase his investment amount or close his current position. Horizontal view of the time scale Vertical view of the price range The Current market rate 22

23 POSSIBLE OUTCOMES FOR THE QUICK OPTIONS In-the-Money (ITM) expiration: UP (Call) options expire ITM when the market price is higher than the target price at expiration. DOWN (Put) options expire ITM when the market price is lower than the target price at expiration. Out-of-the-Money (OTM) expiration: UP (CALL) options expire OTM when the market price is lower than the target price at expiration. DOWN (PUT) options expire OTM when the market price is higher than the target price at expiration. At-the-Money (ATM) expiration: Options will expire At-the-Money if they expire at the same price as the strike price. 23

24 HIGH/LOW The High/Low trade type lets you decide whether the market price will close higher or lower than the current price. In a Call (UP) option (predicting an uptrend), the price of the financial asset must stay higher than the striking price by the end of the option s time frame. In a Put (DOWN) option (predicting a downtrend), the price needs to stay below the striking price by the end of the option s time frame. 24

25 Asset Navigation Type of Option Market Asset Information Asset Name Time of expiry The payout percentage Choose a Call (UP) Option Choose a Put (Down) Option The Strike Price 25

26 Asset Chart Information Option expiry time Asset Name The gray area indicates the asset price recent behavior Investment amount box Up (Call) OR DOWN (put) button The white area presents the range in which the trader can open the position, increase his investment amount or close his current position. Horizontal view of the time scale The Current market rate Vertical view of the price range The Current market rate 26

27 Possible Outcomes for the High/Low Option In-the-Money (ITM) expiration: UP (Call) options expire ITM when the market price is higher than the target price at expiration. DOWN (Put) options expire ITM when the market price is lower than the target price at expiration. Out-of-the-Money (OTM) expiration: UP (CALL) options expire OTM when the market price is lower than the target price at expiration. DOWN (PUT) options expire OTM when the market price is higher than the target price at expiration. At-the-Money (ATM) expiration: Options will expire At-the-Money if they expire at the same price as the strike price. 27

28 ONE TOUCH The One Touch trade type lets you choose a certain value which the market price has to reach (at least once) before the expiry time. In a Call (UP) option, the price needs to climb and reach the high boundary presented on the chart (approximately 30 pips). In a Put (DOWN) option, the price needs to drop and touch the low boundary presented on the chart under the striking price (approximately 30 pips). 28

29 Asset Navigation Type of Option Market Asset Information Asset Name Time of expiry The payout percentage Choose a Call (UP) Option Choose a Put (Down) Option The Strike Price 29

30 Asset Chart Information Option expiry time Asset Name The gray area indicates the asset price recent behavior The Current market rate Investment amount box Horizontal view of the time scale Vertical view of the price range Up (Call) OR DOWN (put) button The Current market rate The white area presents the range in which the trader can open the position, increase his investment amount or close his current position. 30

31 POSSIBLE OUTCOMES FOR THE ONE TOUCH OPTION In-the-Money (ITM) expiration: UP (CALL) options expire OTM if during the time frame the price does not touch the upper gray area. DOWN (PUT) options expire ITM when the price crosses and touches the lower gray area before the expiration. Out-of-the-Money (OTM) expiration: UP (CALL) options expire OTM if during the time frame the price does not touch the upper gray area. DOWN (PUT) options expire OTM if during the time frame the price does not touch the lower gray area. 31

32 RANGE HIGH/LOW In the Range trade type, there are both an upper and a lower target price that jointly form a boundary range. In a call option (predicting an uptrend) the price needs to stay higher than the striking price and lower than the upper line. In a put option (predicting a downtrend) the price needs to stay lower than the striking price and higher than the lower line. 32

33 Asset Navigation Type of Option Market Asset Information Asset Name Time of expiry The payout percentage Area range is between the current price up Area range is between the current price down The Strike Price 33

34 Asset Chart Information Option expiry time Asset Name The high border in UP position, if the market price reaches this border, before expiry time, is it In the Money The gray area indicates the asset price recent behavior The Current market rate Investment amount box Up (Call) OR DOWN (put) button The Current market rate The white area presents the range in which the trader can open the position, increase his investment amount or close his current position. Horizontal view of the time scale The low border in DOWN position, if the market price reaches this border, before expiry time, is it In the Money Vertical view of the price range 34

35 POSSIBLE OUTCOMES FOR THE RANGE OPTION In-the-Money (ITM) expiration: UP (Call) options expire ITM when the market price stays within the range of the upper gray area and the strike price at expiration. DOWN (Put) options expire ITM when the market price stays within the range of the lower gray area and the strike price at expiration. Out-of-the-Money (OTM) expiration: UP (CALL) options expire OTM when the market price exits the call range sector during the trade. DOWN (PUT) options expire OTM when the market price exits the put range sector during the trade. At-the-Money (ATM) expiration: Options will expire At-the-Money if they expire at exactly the same price as the higher or lower boundary line. 35

36 OPEN A TRADE 36

37 TRADING BINARIES IS A SIMPLE 4-STEP PROCESS: 1. Select a financial asset- this depends on your personal perspective or theuse of different methods described in the ebook (correlation, fundamental analysis, technical analysis). 2. Choose a direction either Call (UP) option for an uptrend, or a Put (DOWN) option for a downtrend Click Invest 3. Enter the amount you would like to invest we suggest you read the money management explanation to ensure an effective investment. Once you opened a trade, the sector below the chart will reveal trade summaries (Recent Trade Actions), for all your current open positions. 37

38 Completed Trades By definition, binaries offer a predetermined time frame that automatically closes at the time of expiration. However, Opteck traders have the option to end a trade before the expiration time (white sector of the graph) regardless of the option s position, whether it s In-the-Money or Out-of-the-Money. To close an option before the expiration time, click the arrow icon located at the right-hand side of your open position and click the SELL button Closing a trade before its expiration will only reward you in a partial return rate, offered by our algorithm calculation. 38

39 FREQUENTLY ASKED QUESTIONS (FAQ) 39

40 TRADING What are binaries? Binaries are a convenient tool for trading financial assets online. They are predictions on how the market price of a certain stock, currency, commodity or index will perform over a specific amount of time. Binaries can be described as an all-ornothing investment; they can either expire above or below the strike price, rather than being sold at a given price. The binary payouts are expressed as a percentage of the investment, and are determined prior to entering the trade. A fixed value is paid to you if the trade expires In-the-Money. Should the trade expire Out-ofthe-Money, the initial investment will be lost. Generally, the returns on successful investments range anywhere between 64%-400% profit. What are underlying financial assets? Underlying financial assets are a general term for currencies, stocks, commodities and indices. Because there is no ownership of financial assets when a binary position is purchased, the cash value reflects the live market price of the financial asset on which it is based upon. What are Call (UP) Options? A Call option will generate a profit if it expires above the strike price at the expiration time. If the position expires precisely at the level of the strike price, then the initial investment is reimbursed. What are Put (DOWN) Options? A Put option turns profitable if it expires below the strike price. The pre-determined payout is triggered if the position expires at any point below this strike price. If the position expires at precisely the level of the strike price, then the investment is reimbursed. What is an investment amount? The amount of money invested in a single trade. This amount is not fixed and can vary according to the trader s choice. Payouts are then calculated based on the total investment amount. It also determines the return rates (protection rate) of investments expiring Out-of-the-Money. 40

41 What is the time zone presented on the platform? Opteck s platform presents the time zone according to GMT (Greenwich Mean Time). When can I Trade? Financial assets are available for trading as long as the financial markets are active. The markets are open throughout the week, apart from Saturdays and Sundays (with the exception of TA-25 and DUBAI). Financial assets that are attached to a specific market, such as indices and stocks, are only tradable if a related stock exchange is operative. How to open a Trade? The next 4 steps lay out how to invest in binaries: 1. Select a financial asset- this depends on your personal perspective or the use of different methods described in the ebook (correlation, fundamental analysis, technical analysis). 2. Choose a direction either Call (UP) option for an uptrend, or a Put (DOWN) option for a downtrend. 3. Enter the amount you would like to invest we suggest you read the money management explanation to ensure an effective investment. 4. Click Invest. Note: By clicking on the Call (UP) or Put (DOWN) button, the investment sheet will allow you to enter this information and approve the execution of the trade. The data on the information sheet will update constantly to reflect the changing price of underlying financial assets. The selection can be canceled at any time by pressing the X button before the transaction has been approved. How does Opteck set the market price of a financial asset? Opteck receives the financial asset value from several market data providers. The accuracy of our market prices is evident when they re compared to several feed providers' prices (considered to be the standard pricing tool for traders all around the globe). The market price at Opteck provides an extra digit, therefore presenting prices through a more precise reflection. 41

42 What return will I make if my option ends In-the-Money? A successful investment will refund the traders account with its original investment and a profit depending on the type pf trade, asset and expiration time. The profit percentage is presented on the option and varies between 64%-400% profit. I attempted to invest a certain amount on a single option, but got an error message saying I exceeded the maximum investment amount. What do I do? We allow you to invest up to $10,000 in one position. However, you can always spread your investment across several different options. What is the rate displayed in the trading box? The rate is a reflection of the financial assets market price. Levels are determined by the Opteck proprietary algorithms, a calculation of the bid price and the ask price of the financial asset in the market. What are expiry levels? Expiry levels represent the available times at which options expire. They reflect on the trade s results, as to whether the option expires In-the-Money or Out-of-the-Money. Please notice that some financial assets may have different expiry levels. What are expiry times? The expiry times are the precise moment in which the option expires. This expiry time is predetermined by the traders when opening a trade. Can I change the expiry times or time frames? No, the time frames are predetermined before you enter the trade. However, our position duration varies between 60 seconds and 3 months, and you can have as many as 20 trades open simultaneously. This gives you a lot of flexibility when trading on the market. What is the difference between the closing time and the expiry time? The expiry time is when the position expires and has ended its pre-determined life cycle. Whereas, the closing time is when you are no longer able to take action on the trade, whether that be to enter the trade or to sell out the trade. How is the purchasing of options at Opteck different from buying options in the stock market? The main difference between binaries and traditional day trading is the profit/loss factor. In binary trading, your profit depends entirely on the outcome of yes/no proposition. 42

43 You earn a fixed payout and can only lose your initial investment amount. The profit/loss in traditional trading depends on a number of factors: entry/exit price, the number of shares purchased, contracts etc. Binaries became so popular because they offer shorter contracts with increased flexibility on each option, ranging from 60 seconds up to 3 months, unlike traditional "Vanilla" Options. The traditional exchange-traded options are characterized by having longer expiry times and are determined by the degree of price fluctuation at the time of sale. They also do not have a predetermined payout rate, like binaries do. What do the colors of the levels on the trading floor represent? The colors reflect the relative position of the price against the last trading price. The Opteck expiry level is either higher (green) than the previous price or lower (red) than the previous price. If an expiry level of an underlying financial asset is similar to the level at which the transaction was made, what then? If the price expires precisely in the level at which the option was executed (At-the-Money), then the investment will be fully reimbursed to the investor. Are these profits taxable? Taxation will generally depend on the tax law governing your country of residence. Opteck customers are therefore responsible for their own tax liabilities and Opteck has no liability over payments of tax. Why am I unable to trade? 1. If your account contains insufficient funds, you will need to fund it before being able to trade. 2. Our trading platform operates within the market hours, quoting real-time market prices. Therefore, there's no trading while the markets are closed. If these are not the reasons for your issue, please contact us at support@opteck.com What is the minimum investment amount per trade? The minimum investment amount per trade is $25. What is the maximum investment amount on a trade? The maximum investment amount per trade is $10,

44 What are my deposit possibilities? Deposits can be made in multiple ways. You can use Visa, MasterCard, Neteller, Skrill, Western Union, PaySafe, CashU and bank wire transfers to fund your account. More details on deposit methods are available on the Funding Process page. What currencies can I use in my account? The account currency is determined in advance by the country from which you have registered. This currency cannot be changed after the account has been administered. Opteck customers can trade with all major currencies. Is there a minimum withdrawal amount? Yes, the minimum withdrawal amount is $100. In order to withdraw funds, you will first need to verify your account How may I withdraw profits? Log in to your account and press Withdrawal under the Deposit button. Then, follow the displayed instructions for withdrawal: 1. Fill in the withdrawal amount. 2. Click Withdraw. 3. Your account manager will contact you to finalize your request. Must I deposit money to register? No, deposits and financial data are not necessary during registration. What is the meaning of a Reverse Withdrawal? A Reverse Withdrawal allows a withdrawal request to be canceled even if it has already been entered into the system. This prevents situations where a withdrawal may prevent investing activity due to insufficient funds. The reversal procedure guarantees that funds can be reaccredited to your Opteck account and later be utilized for trading. What is a Swift code? A Swift code is an interbank transfer code which allows money to be exchanged. Each Swift code has a unique eight-digit code ending in XXX. Your bank will provide you with the code once in need. 44

45 MY ACCOUNT I forgot/lost my password. How can I recover it? In case you forgot your password, you will need to press the LIVE CHAT box or click on the forgot your password? When trying to login to your trading account, enter your personal details and click send. You ll then receive an to the account used during registration, containing your password reset instructions. In case you would like to change your password, please do the following: 1. Click your username in the middle of the site header and Select Change Password. 2. Fill in your current password in the Old Password field. 3. Fill in your new password in the New Password and Re-type New Password fields. 4. Click Change Password. That's it. You have a new password. Where can I see my transaction history? All account activity may be accessed by clicking the Reports button. Why can't I see a particular financial asset? The only case where a financial asset is not displayed on the platform is when it's not available for trading. All financial assets can be found on the trading platform by pointing on the selected tradable asset or in the Asset Index. How can I change my personal details? Personal details and information can be changed and updated at any time: 1. Click your username in the middle of the site header. 2. Select Account Details. 3. Type your new details in the designated fields and, when done, click Save. You will receive a message indicating your Info has been updated. 45

46 TECHNICAL Do I need to download any software to use Opteck's trading platform? No. Trading with Opteck only requires registration and an initial deposit. How may I switch the display language? Languages can be changed by using the drop down menu at the top of Opteck s platform. The default language after login will be the one selected at registration. In order to change language on a later occasion, please contact our Customer Support team. If you are inside the trading platform and you would like to change the displayed language, click on the Settings tab located in the top right corner of the screen, select a different language from the Select Language drop-down menu and press the Save button. 46

47 GLOSSARY 47

48 60 Second Option: A quick option with a time frame of only 60 seconds. American option or "option": An option that can be exercised at any time during its lifespan. These options, unlike European options (i.e. binary or digital), do not need to wait until maturity to be exercised. Ask: The price at which an investor can buy a financial asset in the financial markets. The asking price is part of the formula used to calculate the expiry level of a financial asset. Asset/Underlying Financial Asset Financial assets are economic valued references. They represent the value of either corporations (stocks), currencies, indices or commodities. At-The-Money (ATM): ATM represents an option which expired and the outcome of the trade is inconsequential. ATM occurs when the current price of the underlying financial asset is identical to the price at which it was purchased. Binaries/Digital Options: Binaries are a tool that simplifies online trading. Instead of the traditional trading methods, here traders only have to choose a direction, either UP or DOWN. In addition, binaries offer traders to predetermine the investment amount, and thus lower the risk involved in trading. Call (UP): A Call (UP) option refers to an option in which you predict that the price of the financial asset will be higher than the strike price at the time the option expires. Trading Hours: Each and every financial asset has its own trading hours and/or trading days. Current Price: The current market price of an underlying financial asset. Once the binary position has been purchased the price at which it was utilized, becomes the strike price. Current prices are determined objectively by real-time data providers. 48

49 Entry Rate/Strike Price: The current market price of a financial asset once it is executed as an option. European Option: An option that can only be exercised when it reaches the end of its life. Most binaries are European options. Expiry Rate: The price of the underlying financial asset when the option expires. This price determines whether the option closes At-the-Money, In-the-Money or Out-of-the-Money. Expiry Time: The expiry time expresses the end of an option s time frame. At the time of expiry, it becomes known whether the option was successful or not. The choice of expiry time for a trader may vary, and it is important for traders to understand the time frame with which they are planning to trade. Fundamental Analysis: A method of evaluating markets and trends by utilizing financial and general factors. The goal is to analyze all the factors that can affect a financial asset, such as overall economic conditions, industrial environment and company-specific factors. High/Low: In the High/Low type of trade, you decide whether the market price will be higher or lower than the current price. In a Call (UP) option, the price needs to stay higher than the striking price at the end of the option s time frame. In a Put option (DOWN) the price needs to stay lower than the striking price at the end of the option s time frame. Index/Indices: Stock Index options were introduced to the general public in 1981.An index is a group of publicly traded companies. For example, NASDAQ is an American index that includes more than 3,000 stocks such as Apple, Google, Microsoft, Oracle, Amazon and Intel. Whenever one of these 3,000 companies take a sudden rise or plunge in their stock, this impact can directly affect the entire Index. 49

50 In-The-Money (ITM): ITM represents an option which expired and the outcome of the trade was profitable. For example, if the Option was a Call, then the current price of the underlying financial asset would be higher than the original price at the time the Option had been purchased. In a Call (UP) option the price needs to climb and reach the green line presented on the graph (approximately 30 pips). In a Call (DOWN) option the price needs to go down and reach the red line presented on the graph (approximately 30 pips). One Touch: The One Touch type of trade lets you decide whether the market price will reach a specific amount before the expiry time. Opteck Rates: Opteck allows its clients to buy or sell financial assets with no market spread. The open rate of a Put (DOWN) option is identical to the open rate of a Call (UP) option. Option: An option is a financial derivative that represents a contract sold by one party to another. The option offers the buyer the right to buy (UP) or sell (DOWN) a security, or other financial assets, at an agreed-upon price (strike price) during a specific period of time. Out-of-the-Money: OTM represents an option which expired and the outcome of the trade was unprofitable. For example, an unsuccessful trade, or OTM, occurs when the current price of a financial asset is lower than its original price as the option expires. 50

51 Return rate: The return rate expresses the profit (in percentages) a trader earns in a trade. The return rate is predetermined, and therefore it does not alter depending on the relative success of the speculation, if the contract expires one point or fifty points above the price in a call (UP) option it would still result in the same payout. The return rate is expressed as a percentage of the initial trade investment. Put (DOWN): A Put (DOWN) option indicates that the price of a financial asset will fall below the strike price as the option expires. Protection rate: The protection rate refers to the guaranteed return of an unsuccessful trade. Thus, if the binary trade fails and expires unfavorably for the trader, a small percentage of the original stake will be reimbursed. The protection rate is predetermined, and just like payouts it also offers a fixed price. The protection rate acts as a small consolation in the event that the price moves against the trader. Range: In the Range type of trade, there are both an upper and a lower target price that forms a boundary range. In a call (UP) option: (predicting uptrend in a limited range) the price must remain above the striking price and below the upper line. In a put (DOWN) option: (predicting downtrend in a limited range) the price must remain above the striking price and below the lower line. Stock index: Stock values for a particular group of stocks (often popular stocks) are summed up to create an Index, such as The Dow Jones Industrial Average. 51

52 Technical analysis (TA): TA is a technique for evaluating a security by examining statistics related to its historical performance, such as past prices and volume. Charts and graphs, in addition to other research tools, are utilized to identify any possible patterns that may be used as indicators of future activity. Trend: A trend refers to the movement of a price over a period of time; the longer the price moves sustainably in the same direction, the larger the trend. Recognition of a trend can allow speculators to make informed decisions based on the probability of the future direction of price. Turnover/Volume: The volume represents the measure of trading activity during a given period of time. 52

53 What Does it Take to BECOME A PROFITABLE TRADER Turtle Trading; A Market Legend 53

54 Back in the 80 s, legendary commodity traders Richard Dennis and William Eckhardt used to have frequent discussions about their success. Dennis believed anyone could be taught to trade successfully, while Eckhardt countered that Dennis had a special gift that allowed him to profit from trading. An experiment was set up by Dennis to finally settle this debate. Dennis would find a group of people to train, using his rules, and then have them trade with real money. He called his students "turtles" after recalling turtle farms he had visited in Singapore and professed that he could grow traders as quickly and efficiently as farm-grown turtles. The turtles were taught very specifically how to implement a trend-following strategy. The idea was that the "trend is your friend," meaning you should trade call (UP) on the breaking out of the upside of a trading range and trade put (DOWN) on the downside. Dennis had two turtle classes that he personally trained, lasting two weeks. They then went on to trade professionally, under supervision, and earned more than $175 million in an astonishing five years. What can we learn from this historical tale? First of all, it is worthwhile to take note that once the turtles quit their jobs as traders and went home to try and duplicate this same line of work, using their own funds they lost it all. The moment they tried to trade as home-traders, they failed to follow the strict rules of trading. The absence of a supervising manager, overseeing their trading list, opened the door for their individual perspective, driven by psychology and emotions. Once you have the help of your personal account manager, you ll be provided with a professional analysis of your behavior as a trader in addition to critique, and elevate your knowledge and trading skills. Binary trading is the only trading method that allows you to eliminate the noise of the live market by applying a specific pattern of trade, that will actually lower the emotional element and elevate the professionalism of an individual trader. As a result, you d be able to position yourself with a competitive advantage in front of other members of the traders community. As an Opteck trader, you will be granted a broad range of educational tools to help you quickly and effectively understand the financial markets in general, and the art of binary trading in specific. We highly recommend you to use these tools and follow our brokers advice in order to raise your trading confidence and consequently increase your earnings. And while in the process, make sure you properly understand and use the tools we equip you with. 54

55 A few guiding rules to get you started: 1. Base your trading decisions and predictions on the financial assets prices, rather than relying on information from the media. 2. Have some flexibility in setting the parameters for your buy and sell signals. Test different parameters for different markets to find out what works best. 3. Plan your exit as you plan your entry. Decide when you will gain profits and when you will cut losses. 4. Use the average true range to calculate volatility and use this to vary your position size. Take larger positions in less volatile markets and lessen your exposure to the more volatile markets. 5. Don't ever risk more than 2% of your account on a single trade. 6. If you want to make big returns, you need to get comfortable with large drawdowns. Please note: These guiding rules were founded and performed on the stock market. When trading binaries, we can discard rules 2, 3 and 5, and further simplify your trading experience. 55