A Binary Trading Platform Explained
Now that we’re armed with the basics of binary options, it’s time to walk you through a real-world binary option trading platform, albeit a demo one only, but sufficient for educational purposes.
The Main Screen of the platform
This is the binary broker’s trading screen for Forex pairs. There are different screens for stocks or for commodities.
On the top, right-hand side you see your account balance (yellow box, #1), which is the sum total of the deposits you made till date, your profits/losses and less your withdrawals.
The chart panels (‘Asset Chart in Real Time,’#2) on the right side show you the price behavior of different currency pairs. These charts usually update in real time and helpful to assess the trend based on which you can decide to buy a call or a put. You can choose from the different time frames, e.g. a 1-minute chart, 5-minute chart or hourly.
On the top, left side is the most important area – it’s where you trade.
Choose whichever panel you want to trade.
We want to trade the asset USD/JPY (#3), and the next available expiry (#4)) is 12:10 pm. I am bearish and feel that USD/JPY will be lower than 99.136, the current Strike Price (#6) by the time the option expires. So I avoid the ‘Higher’ (#5) button and press the ‘Lower’ (#9) button, and confirm the Stake (#6) amount of $10. I can see that if my deal goes right, I stand to make a Profit % (#8) of 89% and a Payout Amount (#8) of $18.90.
The deal is done
The trade is executed at the strike price of 99.139, and I now wait with baited breath on its outcome! You can see in the yellow box (#1) above that the likely payout is indicated by the platform. The strike price is red-lined at #2.
The Outcome of the trade
One look at the chart tells me that I was right being bearish. Upon expiry, the trade is reflected in the ‘Completed Trades’ panel at the bottom.
My USD/JPY option trade (green box, #1) expired at 99.130, below the strike price. Since I bought a ‘Put’ option, it expired ‘in-the-money,’ and as you can see, the broker credited my account with $19.00.
On the other hand my earlier binary trade in Gold (red box, #2) backfired.
So you see, it is quite simple to trade binaries.