BinaryOptions-Guide

Table of Contents

Welcome to Binary Options .......................................................................................................................... ii Disclosure ..................................................................................................................................................... iii Introduction .................................................................................................................................................. 1 Glossary ......................................................................................................................................................... 4 Before Trading Begins ................................................................................................................................... 6 Watching the Trend Line ............................................................................................................................... 7 FOREX Charts .............................................................................................................................................. 11 Factors that Affect Trends .......................................................................................................................... 12 What Do You Need To Trade Binary Options.............................................................................................. 13 Recommended Brokers............................................................................................................................... 14 Binary Options......................................................................................................................................... 14 Forex Trading .......................................................................................................................................... 14

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Welcome to Binary Options By: The Rookie DayTrader Notice To Traders and Future Traders Trading in the currency (FOREX), Stock, Commodities Markets, and Binary Options involves risks. You should only trade with monies that you can afford to lose. You should never use funds from your retirement accounts, children’s school accounts, personal savings accounts, or credit card accounts that you can’t afford to pay. The trends in the stock markets are very volatile and constantly fluctuating. If you are interested in being a trader in this economic jungle, you might find yourself surprised and confused with the differing trends and patterns in the market. It may be very difficult to find good stocks that you can trade with much ease. Getting to know the right stocks and markets to trade is very critical and in doing so, it is very important that you understand how the company you are giving your investment to, makes a substantial amount of its money. Unless you have a good understanding of a company’s market, its products, as well as its competitive strengths and weaknesses, it would be pretty difficult for you to foresee whether or not your investment is profitable. When you trade in the currency markets you are not trading in actual stock certificates. You are trading in the value of one currency against that of another. This report is intended as informational and educational material for you to study. You should always do your own research and make your own decisions. DO NOT let anyone force you into making a decision that you don’t want to make. Remember, “NO” is a complete sentence. With that said, I’ll leave you with one thought… How do you make a small fortune in the Markets? You start with a large one! Good Trading, The Rookie DayTrader

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Disclosure COPYRIGHT AND TRADEMARK NOTICES This eBook is Copyright © 2010 All Rights Reserved. Published in the United States of America by RookieDayTrader.com, Inc. d.b.a. BestBinaryOptionsTrading.com. The legal notices, disclosures, and disclaimers in this eBook are Copyright © 2009 Law Office of Michael E. Young PLLC, and licensed for use by this eBook. All rights reserved. No part of this eBook may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by an information storage and retrieval system — except by a reviewer who may quote brief passages in a review to be printed in a magazine, newspaper, blog, or website — without permission in writing from the Author. For information, please contact: Customer Support. All trademarks and service marks are the properties of their respective owners. All references to these properties are made solely for editorial purposes. Except for marks actually owned by the Author, the Author (as both author and as publisher) does not make any commercial claims to their use, and is not affiliated with them in any way. Unless otherwise expressly noted, none of the individuals or business entities mentioned herein have endorsed the contents of this eBook. LIMITS OF LIABILITY & DISCLAIMERS OF WARRANTIES The materials in this eBook are provided “as is” and without warranties of any kind either expresed or implied. The Author disclaims all warranties, expresed or implied, including, but not limited to, implied warranties of merchantability and fitness for a particular purpose. The Author does not warrant that defects will be corrected, or that the site or server that makes this eBook available are free of viruses or other harmful components. The Author does not warrant or make any representations regarding the use or the results of the use of the materials in this eBook in terms of their correctness, accuracy, reliability, or otherwise. Applicable law may not allow the exclusion of implied warranties, so the above exclusion may not apply to you.

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Under no circumstances, including, but not limited to, negligence, shall the Author be held liable for any special or consequential damages that result from the use of, or the inability to use the information in this eBook, even if the Author or his authorized representative has been advised of the possibility of such damages. Applicable law may not allow the limitation or exclusion of liability or incidental or consequential damages, so the above limitation or exclusion may not apply to you. In no event shall the Author’s total liability to you for all damages, losses, and causes of action (whether in contract, tort, including but not limited to, negligence or otherwise) exceed the amount paid by you, if any, for the use of this eBook. Facts and information are believed to be accurate at the time they were placed in this eBook. All data provided in this eBook is to be used for information purposes only. The information contained within is not intended to provide specific legal, financial or any other advice whatsoever, for any individual or company and should not be relied upon in that regard. The services described are only offered in jurisdictions where they may be legally offered. Information provided is not all-inclusive, and is limited to information that is made available and such information should not be relied upon as all-inclusive or accurate. For more information about this policy, please contact this site at: Customer Support. AFFILIATE COMPENSATION DISCLOSURE This eBook contains hyperlinks to websites and information created and maintained by other individuals and organizations. The Author does not control or guarantee the accuracy, completeness, relevance, or timeliness of any information or privacy policies posted on these linked websites. You should assume that all references to products and services in this eBook are made because material connections exist between the Author and the providers of the mentioned products and services (“Provider”). You should also assume that all hyperlinks within this eBook are affiliate links for either (a) the Author or (b) someone else who is an affiliate for the mentioned products and services (individually and collectively, the “Affiliate”). The Affiliate recommends products and services in this eBook based in part on a good faith belief that the purchase of such products or services will help readers in general. The Affiliate has this good faith belief because (a) the Affiliate has tried the product or service mentioned prior to recommending it or (b) the Affiliate has researched the reputation of the Provider and has made the decision to recommend the Provider’s products or services based on the Provider’s history of providing these or other products or services. The representations made by the Affiliate about products and services reflect the Affiliate‘s honest opinion based upon the facts known to the Affiliate at the time this eBook was distributed by the Affiliate. Copyright © 2010 The Rookie DayTrader.com, Inc. d.b.a. BestBinaryOptionsTrading.com Page | iv

Because there is a material connection between the Affiliate and Providers of products or services mentioned in this eBook, you should always assume that the Affiliate may be biased because of the Affiliate’s relationship with a Provider and/or because the Affiliate has received or will receive something of value from a Provider. Perform your own due diligence before purchasing a product or service mentioned in this eBook. The type of compensation received by the Affiliate may vary. In some instances, the Affiliate may receive complimentary products, services, or money from a Provider prior to mentioning the Provider’s products or services in this eBook. In addition, the Affiliate may receive a monetary commission or non-monetary compensation when you take action by clicking on a hyperlink in this eBook. This includes, but is not limited to, when you purchase a product or service from a Provider after clicking on an affiliate link in this eBook. EARNINGS AND INCOME DISCLAIMER No Earnings Projections, Promises or Representations For purposes of this disclaimer, the term “Author” refers individually and collectively to the Author of this eBook and to the Affiliate (if any) whose affiliate links are embedded in this eBook. You recognize and agree that the Author has made no implications, warranties, promises, suggestions, projections, representations or guarantees whatsoever to you about future prospects or earnings, or that you will earn any money, with respect to your purchases in this eBook, and that the Author has not authorized any such projection, promise, or representation by others. Any earnings or income statements, or any earnings or income examples, are only estimates of what you might earn. There is no assurance you will do as well as stated in any examples. If you rely upon any figures provided, you must accept the entire risk of not doing as well as the information provided. This applies whether the earnings or income examples are monetary in nature or pertain to advertising credits which may be earned (whether such credits are convertible to cash or not). There is no assurance that any prior successes or past results as to earnings or income (whether monetary or advertising credits, whether convertible to cash or not) will apply, nor can any prior Copyright © 2010 The Rookie DayTrader.com, Inc. d.b.a. BestBinaryOptionsTrading.com Page | v

successes be used, as an indication of your future success or results from any of the information, content, or strategies. Any and all claims or representations as to income or earnings (whether monetary or advertising credits, whether convertible to cash or not) are not to be considered as “average earnings”. Your Success or Lack of It Your success in using the products, information, or strategies provided in this eBook depends on a variety of factors. The Author has no way of knowing how well you will do, as he does not know you, your background, your work ethic, your dedication, your motivation, your desire, or your business skills or practices. Therefore, he does not guarantee or imply that you will get rich, that you will do as well, or that you will have any earnings (whether monetary or advertising credits, whether convertible to cash or not), at all. Businesses and earnings derived therefrom involve unknown risks and are not suitable for everyone. You may not rely on any information presented in this eBook or otherwise provided by the Author, unless you do so with the knowledge and understanding that you can experience significant losses (including, but not limited to, the loss of any monies paid to purchase products through this eBook and/or any monies spent setting up, operating, and/or marketing your personal or business activities, and further, that you may have no earnings at all (whether monetary or advertising credits, whether convertible to cash or not). Due Diligence You are advised to do your own due diligence when it comes to making business decisions and should use caution and seek the advice of qualified professionals. You should check with your accountant, lawyer, or professional advisor, before acting on this or any information. You may not consider any examples, documents, or other content in this eBook or otherwise provided by the Author to be the equivalent of professional advice. The Author assumes no responsibility for any losses or damages resulting from your use of any link, information, or opportunity contained in this eBook or within any other information disclosed by the Author in any form whatsoever. YOU SHOULD ALWAYS CONDUCT YOUR OWN INVESTIGATION (PERFORM DUE DILIGENCE) BEFORE BUYING PRODUCTS OR SERVICES FROM ANYONE VIA THE INTERNET. THIS INCLUDES PRODUCTS AND SERVICES SOLD VIA HYPERLINKS EMBEDDED IN THIS EBOOK.

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Introduction Binary Options have simplified trading quite a bit for the On-the-Go investor. No more agonizing over long term trends and in-depth financial analysis. With Binary Options, often called Digital Options, you are only dealing with a 1 hour time frame for the life of the transaction. Also, you are looking to determine if the price of that transaction will go Up or Down within that hour. When the British Company dealing in financial derivatives and sports betting, IG Index, introduced binary options betting in 2003, investors found they could profit using the simplified betting system. Today, Binary Options betting are provided by IG Index’s associate company “Binary Bet.Com”; also known as “ExtraBet”. Binary Options are not traded within the world Stocks, Commodities, or Forex exchanges. U.S. laws and U.S. Security and Exchange Commission regulations prohibit American residents from participating in Binary Options betting unless they hold an International passport or other international identification showing citizenship in another country. Since Binary Options have become very popular around the world there is a movement within the American financial community to have Binary Options regulated by one or more regulatory agencies in order to open the industry to American residents. However, at this time the above mentioned laws and regulations are in effect. The Binary Options betting industry has adopted standard trading and investment terms to make them more appealing to the investment and financial community. Additionally, Binary Options are traded (bet) on Copyright © 2010 The Rookie DayTrader.com, Inc. d.b.a. BestBinaryOptionsTrading.com

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Currency, Stocks, Indexes, or Commodities using many of the same terms associated with Stocks, Commodities, and FOREX trading. For educational purposes of this Report, all terms used to describe Binary Option betting will use the terms established by the Binary Options industry. In reality, Binary Options do not have any physical product like Stock Certificates. Historically, Binary Options were limited for trading within the large trading firms and have most recently, within the last few years, been made available to the general public through on-line trading. In this Report we will outline the general scope of Binary Options. For the experienced trader this report will be a good reference and for the beginning trader it will be a good first step in understanding Binary Options. This Report is provided free of charge. If you have paid for it from a site you should immediately request a refund. Feel free to pass this report to your friends.


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The asset, Sometimes referred to as The Instrument.

Let’s look at an example of a trading window and identify some of the components of the Binary Options trading functions. Please consult the Glossary of Terms on the next page of this Report.

As you can see, the trading window is quite simple as compared to a regular Options trading window. You only need to select, in this order, the Investment Amount, either the Call or Put option, and the Trade button which appears after the Call or Put option is selected. That’s it.


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Glossary Every profession has its own unique terminology. The terms used in trading can be confusing at first glance. However, if you take a few minutes to learn them you’ll see they make quite a bit of sense. Asset or Instrument A currency pair, stock, commodity, or index that is being traded. Current Price The price as of the moment you are looking at the value of the Option that you wish to trade. Strike Price The price of the Asset at the time the trade is made. Also referred to as the Execution Price or Buying Price. Expiry Price or Closing Price The price of the Asset at the end of the trading time. Expiry Time The time and date at the end of the trading period. Often referred to ad the Option Expiration Date and Time. Call Option You select a Call because you are expecting the price of the Option to go up. Put Option You select a Put because you are expecting the price of the Option to go down. This is also referred to as Shorting the Option.


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In-the-money This means you made a profit on your trade. • A Call Option is In-the-Money when the Expiry Price is higher than the Strike Price at the end of the trading period. • A Put Option is In-the-money when the Expiry Price is lower than the Strike Price at the end of the trading period. Out-of-the-money This means you lost the trade. • A Call Option is Out-of-the-Money when the Expiry Level is lower than the Strike Price at the end of the trading period. • A Put option is Out-of-the-Money when the Expiry Level is higher than the Strike Price at the end of the trading period. At-the-money The Expiry Price is the same as the Strike Price during the trading period. Payout The amount of money you receive when the trading period expires and you are “In-the-Money”. Investment Amount The Trade amount when you executed the trade.


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Before Trading Begins Let’s take a look at a few items about Binary Options that you need to know before you start trading. A Binary Option trade is basically, “The price is going Up or the price is going Down.” Some people like to call it a Yes/No proposition. First you must decide if the price of an Instrument/Asset such as a currency pair, a commodity, a stock, or an index is going to go Up (Call Option) or Down (Put Option) from its Current Price. Binary Options can be traded in other ways which are more complicated, however, most Binary Option trading for the on-the-street investor uses this basic process. We’ll discuss other methods of trading Binary Options on our Blog at the Binary Options Blog Weekly Summary. Let’s look at an example of a Binary Options trade. First you select an Investment Amount of $100.00. The Asset shows the published Return is 81%. When you select the Call Option the Trade button is displayed. At the moment you press the Trade button, the Current Value of the option is $53.231 which is now termed the Strike Price. At the end of the Trading Period (Expiry Time), typically an hour, the Closing Price (Expiry Price) is $53.331. In this case the Expiry Price is higher than the Strike Price of the Asset. This means that you will now receive a Return Amount of $181.00. The Return Amount consist of your original $100.00 that you committed for the trade plus the $81.00 represented by the 81% of the published Payout Amount. However, if the price of the Asset at the Expiry Time is lower than the Strike Price of the Asset when you pressed the Trade button you will lose your investment of $100. Copyright © 2010 The Rookie DayTrader.com, Inc. d.b.a. BestBinaryOptionsTrading.com

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As you can see, Binary Options have two possible outcomes, either a Binary Option expires In-the-Money or it expires Out-of-the-Money. Since there are only two possible results when trading Binary Options you will not lose more than your initial investment on any single trade. In conventional options trading, your loss can be much more significant than your initial investment. In Binary Options the Return Amount and the Risk are fixed for the duration of the Trading Period.

Watching the Trend Line The primary factor in trading Binary Options that you need to watch is the Trend Line.

When looking at Trend Lines of a traditional chart the trader views it over a period of several days or several months. That’s because a traditional options trade lasts for a period of up to 3 months, unlike the Binary Options Trading Period which last from 1 hour to several days. Most Binary Options traded on-line have a Trading Period of 1 hour. Binary Options Copyright © 2010 The Rookie DayTrader.com, Inc. d.b.a. BestBinaryOptionsTrading.com

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traded on the commodities exchange, which is available to American residents, at NADEX.com, can last for several weeks and months. The Trend Line of the Binary Option is typically drawn from the Strike Price to the Current Price during an active trade. In the illustration below, if you started the trade at the beginning of the Trading Period, the Trend shows a downward Trend Line. In most cases, a trader doesn’t start a trade until later in the Trading Period so they can take time to research the daily trend. Additionally, they check on current events in the news and events in the Economic Calendar that might affect the trend during this 1 hour trading period.


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What started out as a downward trend later ended as an upward trend within the same Trading Period. Had the trader started a Call trade at the beginning of the period they would have been In-the-Money at the Expiry Price, however, had the trader started a Put trade at the beginning of the Trading Period they would have been Out-of-the-Money at the Expiry Price.

Trend for the Trading Period.

Initial trend that did not hold up during the Trading Period.

Determining the Trend Line during the Trading Period merely takes practice and attention to daily events in the news and events in the Economic Calendar as it relates to the Asset which you are trading.


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Traders also look at the Trend Line from the previous Trading Period in order to try to determine the Trend Line for the Current Trading Period.

As long as the Expiry Price is In-the-Money, even by One Tick, you will receive your payout. This is one of several features that many beginning traders like. It enables them to work with less factors when trading. Brokers are adding more Assets each year as the industry grows. Binary Options have been trading for several years now which makes this a great time to get into this type of trading. Additionally, Brokers are adding new features to their trading platforms all the time thus providing the investor with greater flexibility when trading. When looking for a Binary Options broker, make sure you read their Service Agreements plus review their features and trading Assets. The one thing you don’t want to do is select a Broker that provides a complicated Copyright © 2010 The Rookie DayTrader.com, Inc. d.b.a. BestBinaryOptionsTrading.com

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trading platform. Forget about all of the fancy features that clutter up your trading platform as well as clutter up your work area.

FOREX Charts The one thing a trader can never have too much of is information. Daily and even hourly trend analysis is extremely useful when trading.

You can find a convenient Forex Chart for your research at our site at: http://bestbinaryoptionstrading.com/forex-charts The service is free for you to use. Data in this chart may be delayed at times.


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Factors that Affect Trends Any of the daily market and world economic announcements can affect the trend of the Binary Options trade. The Economic Calendar lists most of the factors that can influence the price of a trade.

The Free Economic Calendar can be found at: http://bestbinaryoptionstrading.com/economic-calendar


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What Do You Need To Trade Binary Options? The tools that you need to trade Binary Options are quite simple: • An Internet connection. • A Desktop PC. • A Laptop PC is optional. • A handheld device like an iPhone or iPad is optional. • A trading account. Note: At the time this Report was prepared Binary Options trading accounts are not available to United States of America residents unless they have an International passport or other International identification documents. The one exception to the above rule is the NADEX.com exchange where trading in Binary Options is regulated by the U.S. Commodities Future Trading Commission (CFTC).


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Recommended Brokers Binary Options

Forex Trading


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