Volatility trading

Volatility Trading

The price of an asset determines the payout, or the amount of money the trader receives.The basic payout is determined by the binary options platform and generally is explained in the payout table on the website.Even with regulated binary options markets, the market is unregulated with limited oversight and no protections for investors.Remember that binary options are still futures in their nature and in that they are agreements to either buy or sell something, in this case an asset at a certain price, in a certain time, as determined by the software of the broker.If a binary options trader is wrong about the direction of an asset, they can lose their money.So, the trade will either end up in the money or not, regardless of how long it takes.Thus, the holder of a put option would be paid the difference between the market price on the expiration date and the put price.

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