Binary options daily are a simple of trading price fluctuations in a multitude of global markets. The trader; however, needs to understand the rewards as well as the risks involved with these often misunderstood trade instruments. Binary options and traditional options are different. Traders will realize that binary options, if traded, have different risks and fees, payouts and even entirely different structures of liquidity and investment processes. Binary options traded outside the United States are usually structured different from those available in the U.S. exchanges. When one is considering hedging or speculating, binary options are the possible alternative but only if and when the trader has an understanding of the two possible outcomes of these rather exotic options. Last year, the Securities and Exchange Commission of the U.S. had warned potential investors of potential risks involved in investing in binary options. It resulted in pressing charges against a Cyprus-based investment company. Charges involved selling these options illegally to unwary U.S. investors. What are Binary Options daily? Binary options daily are classified as “exotic options” but still are very simple to understand and use functionally. The most common option for binaries is a “high-low option”. It is also regarded as a “fixed-return option” since the option has a time/date of expiration and also what is regarded to as a “Strike Price”. It provides access to socks, commodities, indices and foreign exchange. If a trader moves in the market’s direction correctly, and the time of expiration lies on the correct side of the strike price, the trader will be paid a fixed return no matter how much that particular instrument moved. On the other hand, a trader who finds himself / herself wagering incorrectly on the direction of the market will lose their investment. When the trader believes that there is a rise in the market, he/she purchases a “Call”. On the other hand, if he/she believes there is a fall in the market, he/she purchases a “Put”. If a call is purchased, for it to make money, at expiry time, the price must be above the strike price. All the tools in the trade i.e. the strike price, payout, expiry time and the risk are all disclosed at the outset of the trade. For many of the high-low binary options outside the United State, the strike price will be the current price or the underlying financial factor rate e.g. the EUR/USD currency pair, the S&P 500 index, or a particular stock. Therefore, the trader will be wagering if the future price at the time of expiry will be lower or higher than the current price. Foreign Vs U.S. Binary Options daily:- Outside the U.S., binary options daily have, typically, a fixed risk and payout, being offered by individual brokers instead of in an exchange. These brokers make their money from discrepancy percentages between pay outs from winning trades and what’s collected from losing trades. These binary options should be held up to expiry in the “all or nothing” payout structure, there are some exceptions, however. Most of the foreign brokers dealing in binary options have no legal jurisdiction when it comes to soliciting U.S. residents / citizens for the purposes of trading unless the particular broker is registered with a regulatory body in the U.S. such as Commodities Futures Trading Commission or the SEC. Other Types of Binary Options daily:- International binary options daily brokers usually offer several other kinds of binaries, apart from the common high-low binary option. They include the “One Touch” binary option, whereby the price will only need to touch a specific target level once only before expiry of time for the broker to make money. The target is usually below and above the current price, hence the trader can choose the target they believe will be hit before time expires. On the other hand, a “Range” binary option allows a trader to select a range (in price) an asset will trade within until expiry time. If the price stays in “Range”, the trader receives a payout. If not, i.e. if the price moves out of the range specified, the trader looses the investment. A lot of completion has been observed in the binary options daily trading, and as this competition stiffens up, brokers are seen to be offering a wider range of binary options daily trading products. However, even if the structure of the product keeps changing, the risk and reward will always remain known at the trade’s outset. Innovation of this options has led to such options that will offer 50-500% of fixed payouts, thus allowing traders to make more on a trade, potentially, than they would stand to lose, which adds up to a better reward : risk. However, an option offering 500% payout is often structured in a way that the probability of a payout is very low. Some of the foreign brokers usually allow traders to exit their trades before the option expires, most; however, do not. When a trader exits a trade prior to the time of expiration, it results in lower payout which usually specified by the broker, or a small loss, but either way, the trader does not lose their entire investment. The Upsides and Downsides of Binary Options daily Trading:- Binary option trading has its upsides, though it requires a perspective. One major advantage is that the reward and risk are both known, no matter how much the market moves for or against the trader. Also, there also two outcomes: win or lose a fixed amount. Generally, there are also no fees e.g. commissions with these instruments of trade, although brokers may vary. Another benefit is that the trader can access multiple classes of assets in global markets, meaning anytime somewhere in the world a market is open. A major downside in binary options daily trading is that the reward is always lesser than the risk, meaning that the trader has to be right the higher percentage of the time to be able to cover losses. However, other types of binaries (other than the high-low binary option) may offer payouts where the reward is greater, potentially, than the risk. Another drawback is that OTC markets outside the U.S. are unregulated, with a little oversight in operations in cases of trade discrepancies. Even if it is not the norm, traders may still find themselves in susceptible positions with unscrupulous dealers and practices, since brokers often use external sources largely for their quotes. Understanding Binary Options daily: A Point By Point Guide:- 1. Learn the two outcome options by anticipating the expected direction of the movement of the price of the underlying asset. 2. Decide your position. 3. Learn how the price is determined. 4. Learn the advantages of trading in binary options daily over traditional options. 5. Learn where binary options are traded. 6. Check / learn the implicit transaction costs of a binary option.