All binary options offer users the ability to place call or put options based on the value of a variety of global assets at a pre-determined time. If the user correctly predicts the direction of change in value, they will gain a fixed profit from their trade. The difference between American binary option and those traded on EZTrader, is that if a user trades American-style options and the value of the option stays the same (“at the money”) or the value moves in the opposite direction than predicted (“out of the money”) at the expiry time, the trader will be unsuccessful in their trade and will not get any payout.
Unlike American binary options, users who trade binary options on EZTrader get some of their money back even if their trade is unsuccessful.
Take an example where a trader believes that the current value of the FTSE 100 index (5926.30) will rise by the end of the trading day. If the trader places a call option on the value of the FTSE, since they believe the value will rise, they will be successful if the value rises above 5926.30 at the end of the trading day.
To this effect, the trader places a call option in the amount of $100. If it was using American binary options, the trader would only receive a payout if the value went above $805 upon expiration – if he was unsuccessful, his initial $100 will be lost. However, EZTrader users will still receive some of the initial $100 back – typically 10% - allowing them to take this refund so they can withdraw or use it towards other trades.
This is the main reason why trading binary options on the EZTrader platform can be beneficial for long-term trading success. As they say, a little can go a long way – it can mean a lot to receive a small refund through EZTrader when your trades aren’t successful, helping you implement your overall binary trading strategy.
The option prices are the prices by which EZTrader is willing to issue an option for the underlying security, and are not the real time prices for the underlying securities
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