What is 0 – 100 Binary Options Trading?
Following a request from one of our readers here is an article all about 0 – 100 binary options trading. This specific reader has been very successful trading this new type of options. At the moment it’s offered through Anyoption, you can register to trade 0-100 options here. First read the article so you can trade it successfully too. 0 – 100 options trading is a new innovative way of trading binaries. This method of trading binary options was initially pioneered by the leading binary broker AnyOption. The idea behind 0 – 100 options trading is to allow those traders who want to trade in the fast lane have a new and exciting way of trading binaries. With 0 – 100 options, a trader will try to predict is an event will happen or not. The event is usually if the expiry price of an underlying asset will be higher or lower than a certain predetermined level. If the trader feels that the event will not happen, that is when the expiry price ended up identical or lower than the predetermined price, then he will sell options. On the other hand, if the trader feels that the event will occur, then he will buy options.
For example, the trading platform offer the event if the EUR/USD will be higher than the rate of 1.30893 at 10pm (22:00 hrs).
0-100 options trading
Up to this point of time, 0 – 100 options seem very much like the traditional high/low options. We have the strike price (1.30893), the expiry period (10pm/22:00 hrs) and the direction of the price movement (higher or lower). However, this is where all the similarities end. With 0 – 100 options, the payout is not fixed. Instead, the payout is dependent upon the difference after deducting the purchase price from 100.
Let us assume that the trader feels that the event is going to happen. He would then opt to buy options for the event. In our example above, the purchase price is $69.30. The trader’s maximum profit potential is $31.70 which is obtained by deducting 69.30 from 100.
However, if the trader feels that the event is not going to happen, he would have opted to sell options for the event. Using the same scenario above, the trader’s entry price would cost him $30.20. His potential payout however would be $60.80 which is almost twice what he would earn if he buys options. The reason for this big disparity in potential profit levels between buy and sell options is because the sell option is further away from being in the money hence is a higher risk option. As we can see from the above, the sell options offer a return of a whopping 155%!
By now, you might have guessed why these options are known as 0 – 100 binary options. The reason is because the purchase price or entry price can be anything from 0 to 100. On other interesting feature about 0 – 100 options is the fact that they can be traded anytime until the 5 minutes margin before the expiration time. 0 – 100 binaries are indeed an innovative way of trading however, traders must always bear in mind that this type of trading is fast track and is higher in risk than most other types of trades. Those traders who have very little appetite for risks should refrain from trading in 0 – 100 options.