On the left in the picture is a Cashflow 202 card that allows you to buy a call option on OK4U stock.
See that the 'strike' price is $20.
What this means is that if you or somebody else picks up a card similar to the one on the right in the picture, before your next three turns, you can 'exercise' your option, by selling it.
Now in this case, looking at the card on the right, you wouldn't want to sell your call option because the stock price is now only $10. If you did, you would sell the call option and close out the trade at a loss.
You want to wait for you or somebody else to pick up a 'stock' card with a price greater than $20, within your three turns. If this doesn't happen, then you forfeit the money you paid for your call option and you cross off any details on your options worksheet.
Put options work in the same way when the stock price goes down. You want to buy a put option when the share price is relatively high, (say above $25, as most shares trade between $0 and $50).
When the stock price reduces to $10 or even $0 if it goes bankrupt, you will then make a profit.
Throughout Binary Options, there are simply two investment possibilities you'll be able to predict Binary Trading Software
ReplyDeleteCall - where you predict the significance of the asset go up
Put - where you predict it is going to go down.
What are the assets that could be traded as binary possibilities?
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