What is the rate in binary options, Currency Binary Option
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The very fact that the sum is a fixed amount and is already known by the investor means only one thing — you will be able to manage your risk, which is a really great advantage compared to other trading mechanisms you can use.
In order to clarify, here is an example.
Let us assume you want to trade the Dow Industrial Average. The binary options expiration rate is definitely a critical factor here in case you want to achieve success.
Binary options depend on the outcome of a "yes or no" proposition, hence the name "binary. At the time of expiry, the price of the underlying asset must be on the correct side of the strike price based on the trade taken for the trader to make a profit. A binary option automatically exercisesmeaning the gain or loss on the trade is automatically credited or debited to the trader's account when the option expires. That means the buyer of a binary option will either receive a payout or lose their entire investment in the trade--there is nothing in between.
If you see that the index has been declining recently from a prominent high of 12, Since the current price is 12, The expiration rate plays a significant role in the binary options trading outcome as it is a key factor of determining the final result of your bid.
Remember, take a good look and decide what the movement of the asset during your expiration rate will be. This is a key decision, so spare no effort and time in order to make it right.
Importance of Expiration Rate Expiration rate will influence your payout. It is so, because it influences you, the trader, urging you to select whether the price will fall and place a put option or whether it will rise and place a call option.
When placing a bid, there are a couple of important things you have to keep a close eye on. For example, you should always pay attention to the expiration rates listed on past expires of the asset you have chosen.
This will help you analyze past movement and predict more accurately where the price might go next.