As with all options Binary Stock options are in essence a contract between a buyer and a seller that gives the buyer the right, but not the obligation, to buy or to sell a particular asset ( also known as the underlying asset) on or before the option’s expiration time, at an agreed price which is referred to as the strike price . In return for granting the option, the seller collects a payment from the buyer. A call option gives the buyer the right to buy the underlying asset and a put option gives the buyer of the option the right to sell the underlying asset.
There are of course some differences and it is these differences which have seen more and more people with in interest in trading the stock markets turn to binary options to complement and often replace their exisiting stock market trading activities.
Not least among these is that unlike traditional option trading binary stock options come with a risk that is defined when placing a trade. When trading binary options you can never lose more than the amount that you invested. And like with all binary options you know your return when placing the trade as well and you only need to decide which way the price of the stock you have an interest in will head. Returns are usually between 65% and 81% depending on the broker you place the trade at and the stock that you have selected and these returns can be achieved very quickly depending on the expiry time of your trades.
It then becomes clear why many experienced traders and those with a new found interest in trading stocks are doing so using binary options and making very good profits doing so.
If you are interested in trading binary options on stocks you should check out our Pair Options section. Pair Options are binary options on the relative performance of two stocks in a pair and offer some unique opportunities for profitable trading.
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