Trading Forex With Binary Options.
Binary options are an alternative way to play the foreign currency (forex) market for traders. Although they are a relatively expensive way to trade forex compared with the leveraged spot forex trading offered by a growing number of brokers, the fact that the maximum potential loss is capped and known in advance is a major advantage of binary options.
But first, what are binary options? They are options with a binary outcome, i. e., they either settle at a pre-determined value (generally $100) or $0. This settlement value depends on whether the price of the asset underlying the binary option is trading above or below the strike price by expiration.
Binary options can be used to speculate on the outcomes of various situations, such as will the S&P 500 rise above a certain level by tomorrow or next week, will this week’s jobless claims be higher than the market expects, or will the euro or yen decline against the US dollar today?
Say gold is trading at $1,195 per troy ounce currently and you are confident that it will be trading above $1,200 later that day. Assume you can buy a binary option on gold trading at or above $1,200 by that day’s close, and this option is trading at $57 (bid)/$60 (offer). You buy the option at $60. If gold closes at or above $1,200, as you had expected, your payout will be $100, which means that your gross gain (before commissions) is $40 or 66.7%. On the other hand, if gold closes below $1,200, you would lose your $60 investment, for a 100% loss.
Buyers and Sellers of Binary Options.
For the buyer of a binary option, the cost of the option is the price at which the option is trading. For the seller of a binary option, the cost is the difference between 100 and the option price and 100.
From the buyer’s perspective, the price of a binary option can be regarded as the probability that the trade will be successful. Therefore, the higher the binary option price, the greater the perceived probability of the asset price rising above the strike. From the seller’s perspective, the probability is 100 minus the option price.
All binary option contracts are fully collateralized, which means that both sides of a specific contract – the buyer and seller – have to put up capital for their side of the trade. So if a contract is trading at 35, the buyer pays $35, and the seller pays $65 ($100 - $35). This is the maximum risk of the buyer and seller, and equals $100 in all cases.
Thus the risk-reward profile for the buyer and seller in this instance can be stated as follows:
Buyer – Maximum risk = $35.
Maximum reward = $65 ($100 - $35)
Seller – Maximum risk = $65.
Maximum reward = $35 ($100 - $65)
Binary options on forex are available from exchanges like Nadex, which offers them on the most popular pairs such as USD-CAD, EUR-USD and USD-JPY, as well as on a number of other widely traded currency pairs. These options are offered with expirations ranging from intraday to daily and weekly. The tick size on spot forex binaries from Nadex is 1, and the tick value is $1.
The intraday forex binary options offered by Nadex expire hourly, while the daily ones expire at certain set times throughout the day. The weekly binary options expire at 3 p. m. on Friday.
In the frenetic world of forex, how is the expiration value calculated? For forex contracts, Nadex takes the midpoint prices of the last 25 trades in the forex market, eliminates the highest five and lowest five prices, and then takes the arithmetic average of the remaining 15 prices. From December 15, 2014, for forex contracts, Nadex has proposed to take the last 10 midpoint prices in the underlying market, remove the highest three and lowest three prices, and take the arithmetic average of the remaining four prices.
Let’s use the EUR-USD currency pair to demonstrate how binary options can be used to trade forex. We use a weekly option that will expire at 3 p. m. on Friday, or four days from now. Assume the current exchange rate is EUR 1 = USD 1.2440.
Consider the following two scenarios:
(a) You believe the euro is unlikely to weaken by Friday, and should stay above 1.2425.
The binary option EUR/USD>1.2425 is quoted at 49.00/55.00. You buy 10 contracts for a total of $550 (excluding commissions). At 3 p. m. on Friday, the euro is trading at USD 1.2450. Your binary option settles at 100, giving you a payout of $1,000. Your gross gain (before taking commissions into account) is $450, or approximately 82%.
However, if the euro had closed below 1.2425, you would lose your entire $550 investment, for a 100% loss.
(b) You are bearish on the euro and believe it could decline by Friday, say to USD 1.2375.
The binary option EUR/USD>1.2375 is quoted at 60.00/66.00. Since you are bearish on the euro, you would sell this option. Your initial cost to sell each binary option contract is therefore $40 ($100 - $60). Assume you sell 10 contracts, and receive a total of $400. At 3 p. m. on Friday, let’s say the euro is trading at 1.2400. Since the euro closed above the strike price of $1.2375 by expiration, you would lose the full $400 or 100% of your investment.
What if the euro had closed below 1.2375, as you had expected? In that case, the contract would settle at $100, and you would receive a total of $1,000 for your 10 contracts, for a gain of $600 or 150%.
Additional Basic Strategies.
You do not have to wait until contract expiration to realize a gain on your binary option contract. For instance, if by Thursday, assume the euro is trading in the spot market at 1.2455, but you are concerned about the possibility of a decline in the currency if US economic data to be released on Friday are very positive. Your binary option contract (EUR/USD>1.2425), which was quoted at 49.00/55.00 at the time of your purchase is now at 75/80. You therefore sell the 10 option contracts you had purchased at $55 each, for $75, and book a total profit of $200 or 36%. You can also put on a combination trade for lower risk/lower reward. Let’s consider the USD/JPY binary option to illustrate. Assume your view is that volatility in the yen – which is trading at 118.50 to the dollar – could increase significantly, and it could trade above 119.75 or decline below 117.25 by Friday. You therefore buy 10 binary option contracts – USD/JPY>119.75, trading at 29.50/35.50 – and also sell 10 binary option contracts – USD/JPY>117.25, trading at 66.50/72.00. Therefore, you pay $35.50 to buy the USD/JPY>119.75 contract, and $33.50 (i. e., $100 - $66.50) to sell the USD/JPY>117.25 contract. Your total cost is thus $690 ($355 + $335).
Three possible scenarios arise by option expiration at 3 p. m. on Friday:
The yen is trading above 119.75 : In this case, the USD/JPY>119.75 contract has a payout of $100, while the USD/JPY>117.25 contract expires worthless. Your total payout is $1,000, for a gain of $310 or about 45%. The yen is trading below 117.25 : In this case, the USD/JPY>117.25 contract has a payout of $100, while the USD/JPY>119.75 contract expires worthless. Your total payout is $1,000, for a gain of $310 or about 45%. The yen is trading between 117.25 and 119.75 : In this case, both contracts expire worthless and you loss the full $690 investment.
Binary options have a couple of drawbacks: the upside or total reward is limited even if the asset price spikes up, and a binary option is a derivative product with a finite time to expiration. On the other hand, binary options have a number of advantages that make them especially useful in the volatile world of forex: the risk is limited (even if the asset prices spikes up), collateral required is quite low, and they can be used even in flat markets that are not volatile. These advantages make forex binary options worthy of consideration for the experienced trader who is looking to trade currencies.

Corsa Capital Review.
Corsa Capital.
Corsa Capital Investments is a binary options broker based in the British Virgin Islands and originating from Russia. They are unregulated (despite prominently mentioning the British Virgin Islands Financial Services Commission), and do accept USA traders. They are however one of the most dubious brokers I have ever reviewed, and I would not recommend that any trader open an account with them. Why not? I will go over all of the reasons as I discuss the features below.
Terrible, Unclear Website.
Corsa Capital Investments seem to have actually made it their goal to make their language as incomprehensible as possible. There is nothing intuitive about the organization of their information, and there are lots of gaps. On top of that, the company seems to have gone out of their way to try and sound technical without actually making a lot of sense. Their aim is to look like a cutting-edge, professional Forex website, whereas in reality they are a scammy, low-quality binary options website—and really, probably no more than a front for a simple scam. They want to confuse you while at the same time drawing you in.
Strange Deposit, Bonus and Withdrawal Terms.
First off, while we are talking about terms and conditions, where are they? I looked all over the site and could find nothing beyond the privacy policy. That is not good. Here are the unusual terms governing deposits, bonuses, and withdrawals:
While a number of methods are discussed on the site, the only actual deposit and withdrawal options appear to be wire transfer and Qiwi. Why can’t you deposit with your credit or debit card? This is a major issue. In theory, there is a “no deposit” guaranteed $100 bonus for all traders, and you can start trading right away. But you can only apply a tiny percentage of the bonus to each trade, so effectively you cannot make a lot of money. You can never withdraw the bonus, but you can withdraw your profits—but only if you deposit $50 first. This is very confusing and has been a grievance point for a lot of traders.
None of this exactly shouts “trustworthy,” does it?
Awful Proprietary Platform.
There is an online trading platform which you can access once you open an account; you also have the option of downloading a desktop version (there is no mobile trading). You can either open a real account or a demo account. Once you do, you can navigate to the “Corsa Capital Dashboard.” There you will see the worst binary options platform I have ever seen. Along the left hand side, you will see a series of unclear pictograms. You have to hover the mouse over them to see what kinds of trades they are for. To add to the confusion, in the upper right there are additional navigational options for “Intraday trades, Expiry trades, and Tick options.”
I am not sure whether this was the result of an error, the day I chose to review the site, or what, but I could not get any options whatsoever to show up in the main dark blue window. All it would say was “No selected options” no matter what I did. Scrolling down, you can see rising and falling assets on a list, and below that, a chart. In the list, there are more mysterious pictograms. Clicking on one of these will bring up a box which offers you the chance to place a trade. You can choose an option type (from a seemingly limited range), an option value (anywhere from 10 cents to $1,000), and select an expiry time (for High/Low) or two times during the day that price will “rise between.” Or you can do a Tick trade and specify how many ticks a given trade will rise (no expiry time is mentioned).
I cannot even begin to list how many things are wrong with this platform. It is very hard to navigate, does not appear to load properly, and it is terribly unclear what you are getting yourself into with some of these trade types. And why is it so hard to find the simple One Touch and Two Target trades? And what is the point of the Tick trade? Even if the expiry time was clearly specified, it seems like it would be nearly impossible to specify the exact number of ticks the price would rise. This does not look like a trade type you could ever win.
Problems with Customer Service and Reputation.
Usually at this point I start talking about resources and tools, but it is hardly worth mentioning the basic articles and simplistic video tutorials on this site. They make it look like they have a lot of resources, but they don’t. They do list a huge number of contact methods for customer service, including s, telephone numbers, and Skype and ICQ IDs for many different departments. But they do not even offer live chat on the website, something I would expect to see on any binary options website.
And then there is this company’s reputation. To start with, they seem obsessed with trying to convince you they are somehow associated with MetaQuotes Software Corp., the company that makes MetaTrader 4. They are not! They have an associated website called MT5, which has nothing whatsoever to do with MetaQuotes or MT4. All these “MT5” references on their site are very confusing and misleading.
And what about Corsa’s real reputation? They are affiliated with a spot Forex trading broker called InstaForex – a company with poor reputation – visitors of EarnForex rated them 2 stars out of 10. Corsa has received poor ratings on a number of other websites as well. Customers complain they are hard to work with and have confusing terms surrounding their bonuses and withdrawals. I recommend staying away from them. There are literally no grounds for recommending them, and there are so many reasons to avoid them. Check out our recommended brokers instead!
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Binary options trading involve risk. Although the risk of executing a binary options open is fixed for each individual trade, it is possible to lose all of the initial investment in a course of several trades or in a single trade if the entire capital is used to place it. It is not recommended to base your investment decisions on any information presented on or originating from BinaryTrading. By browsing this website you express your acceptance of the terms of this disclaimer and that BinaryTrading cannot be deemed responsible for any losses that may occur as a result of your binary option trading. BinaryTrading is not licensed or registered as a financial consultant or adviser. BinaryTrading is neither a broker, nor funds manager. The website does not provide any paid services. All content of BinaryTrading is presented for educational or entertainment purposes only.
General Risk Warning: Trading in Binary Options carries a high level of risk and can result in the loss of your investment. As such, Binary Options may not be appropriate for you. You should not invest money that you cannot afford to lose. Before deciding to trade, you should carefully consider your investment objectives, level of experience and risk appetite. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to Binary Options or (b) any direct, indirect, special, consequential or incidental damages whatsoever.

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Corsa Forex - Corsa Capital Binary Options Broker Review.
100$ Binary Options No Deposit Bonus.
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Full Review.
Corsa Forex – Corsa Capital Binary Options Broker.
Corsa Forex – Corsa Capital Binary Options Broker – 100$ Binary Options No Deposit Bonus!
Corsa Capital provides private and institutional investors with Internet trading services in financial markets. The main focus of our activity is access to the Binary Options Trading market.
The company offers its original trading terms for exceptionally exclusive software, which no other company in the market of binary options can offer. At the same time this broker is famous for its additional service, such as customer support, which is carried out in the 24/7 format, and advanced training is built with a rather high-quality level.
The Corsa Capital Company offers its customers education of an average quality. Broker’s approach to the related services is scrupulous, but not extensive. Thus, the company offers a number of review articles, guidelines on the use of the terminals as well as a small selection of video tutorials. In general, this “package” of materials is sufficient to achieve initial level required for trading. At the same time more professional materials are to be found elsewhere.