Simplicity-Whether the instrument will close above or below?
  • Binary options are simple to understand and straight forward to trade.
  • The trader only needs to consider the direction of the asset price.
Limited risk and predetermined payout
  • The payoff of a binary option contract is fixed and pre-determined so therefore the potential risk and reward is known from the outset. Whereas with traditional options there are no outlined parameters so the possible loss or gain is not known.
  • The binary option will settle the contract irrespective of how much the asset price is ‘In the money’ at expiration. Therefore even if the contract is only successful by one tick the contract still pays out at the fixed level.
Hedging-Simplified hedging your portfolio
  • Binary options are often used as an effective tool to hedge existing positions. As a product Binary options are compatible to most commonly used trading methods and strategies. Also with binary options its possible to offer a a greater selection of short-term contracts across all markets, which enables the intra-day trader to trade more frequently.
In the money
  • As opposed to vanilla options, While trading binary options the options can close ‘in the money ‘collecting the full payoff even with a minimal price change of a single tick.
Exchangeability
  • Binary options are issued 24/7, allowing traders to trade on multiple time frames. As binaries are on a variety of global underlying assets from different exchanges traders are now able to trade binary options 24/7 under the same binary options platform.