What does Exchange Traded Binary Options mean?
Exchange Traded Binary Options are the binary options that are listed and traded at a registered exchange. A binary option is a type of options contract in which the payout depends entirely on the outcome of a yes/no proposition such as whether the price of a particular asset that underlies the binary option will rise above or fall below a specified amount. In Binary Options, the payoff is either zero or a fixed amount depending on the outcome. Unlike other types of options, a binary option does not give the holder the right to purchase or sell the underlying asset.
Futures Knowledge Explains Exchange Traded Binary Options
For example, you can buy a binary option at Chicago Board Options Exchange (CBOE) whether Google share price will close today above $535. If your prediction comes true, you make money, otherwise you lose money.
While some binary options are listed on registered exchanges and trades are monitored and regulated by the SEC or CFTC, many binary options and binary options trading platforms are unregulated and risky. Before you decide to go for Binary Options, read alerts issued by regulatory authorities such as http://www.sec.gov/investor/alerts/ia_binary.pdf.