Binary Options trade is perfect for the solid investors, who are seeking for a relatively safe and rational investment. Binary Options is a simple investment, therefore attractive for both experienced and non-experienced investors. It require no prior or educational knowledge.

There are numerous ways to perform a Binary Options trade. The first step for an investor is to be aware of the different styles of Binary Options available to him. The most common ones are: Cash-or-nothing, Asset-or-nothing, One-Touch, No-Touch, Double-One-Touch and Double No-Touch.

This paper will focus on the Asset-or-nothing type of trade.

This option enables investors to guess the direction of movement (above or below) of an asset. The above or below options give the investor a strike price in which he will speculate as to whether the market will be above or below that level (strike price) at a specific date. The investor estimates whether the price of a specific good will rise or fall, without paying a significant premium. In the short run, Binary Options creates an investment portfolio with no significant risk.

Initially, one invests an amount of money in an option. It is important to note that the stock (goods, foreign currencies, etc., which are the underlying assets) is never been actually bought. When one places the invested amount, he decides whether he wants a "call" option, or a "put" option. A "call" option will expire "in the money" if the underlying asset expires above the strike price. Basically, one is saying that the underlying asset is going to go up between the time of his investment, and the expiration time. This can be one hour, one day, or one week later.

At the time of purchase, the investor determines the reference price, which is called quote (usually the price of the item at the time of purchase). The contract is bought as PUT (if the investor thinks that the asset expiration price will be above the price of the quote) or CALL (if the investor thinks the asset expiration price will be below the price of the quote).

The payment is determined by the assets price at the time of purchase as opposed to an arbitrary quote. Thus, the payment options is based on the number of shares purchased in advance, and on the change in share price, but not for the options on the property.

In addition, in this kind of trading options, when the options expires, if the investor is right, his profit will be the predefined amount, and if he was wrong, he will lose between 100% to 85% of the investment (in accordance with the approved set when he bought the options).

To execute this type of options, one just needs to click on the call or put button. Once the trade is executed, the investor is locked into a trade that expires at a specific date.