What is a forex option?
Binary options are derivatives of financial instruments. A forex option is a contract that grants the buyer the right, but not the obligation, to buy or sell a financial asset at an agreed price in a predetermined term.
InstaForex clients can buy call and put binary options choosing from 72 instruments in the Forex Options
of Client Cabinet. Clients can trade options using accounts in US dollars, euros, or Russian rubles. Besides, option trading is available to accounts in USD cents and EUR cents with a nominal value of 100-50,000.
||Min option value
||Max option value
||US Cent 100
||US Cent 50,000
||EUR Cent 100
||EUR Cent 50,000
Option trading in a nutshell
Intraday binary options are bought/sold and closed within 24 hours. The shortest term of an option is one minute. Expiry binary options are bought/sold for the term of up to 4 weeks. To make your trading more convenient, the web page for option trading contains a chart of forex rates to simplify the choice of a suitable time frame. When trading forex options, you can use information from the archive of forex rates, which is available both in the Options section and on the official InstaForex website. In the Options live feed, you can look up online statistics on active, pending, and closed options. In the special section, you can view the archive of options.
Every InstaForex client can trade binary options using a variety of trading instruments such as 21 currency pairs, gold, silver, and CFDs on 49 shares. Below you can find a full list of all trading instruments available for option trading with InstaForex.
How to trade binary options?
A binary option is a financial contract. In case a contractual condition is fulfilled, a binary option can yield a stable high profit, which is assessed in advance. For both intraday and expiry binary options, a profit is calculated by means of multiplying an option value by 1.8. A risk is limited to an option premium (the amount you paid to buy an option). After an option is bought, a premium or option value is debited from a client's account. In case an option is in-the-money, a full premium plus a profit return to a client's account. If an option is out-of-the-money, a trader loses only a premium. Any minor change in an asset's value can bring a profit. An investor can buy an unlimited number of options in a trading day. In essence, an option deal is considered to be winning, if a trader has made the right forecast and a contractual condition has been fulfilled. In other words, a strike price should be either higher or lower than a market price at an expiration time.
You will find out an amount of your earnings when you fill in a special form in the Forex options section and click on the button "calculate profit".
Option trading with InstaForex appeals to many traders because:
- Option strategies are easy;
- Any retail trader can afford to trade options, setting any option value;
- Any trader has high profit potential;
- Risks and earnings can be assessed in advance;
- Traders can profit in any market environment.
InstaForex clients can explore all opportunities of option trading on demo accounts. So you can practice option trading in the Demo accounts section.
Add forex options to your investing toolkit!