This Article is About
binary options
stocks bonds
securities and exchange commission
government bonds
better tomorrow
cachet
Binary Options - Derivatives Today
Join 1000's of Authors at StreetArticles Today!

Binary Options   -   Derivatives Today

There are about two dozen world commodities. These days almost every actively traded commodity has a futures market, a market, and a binary options market associated with it. This is true of currencies and government bonds, too. Stocks, however, have more controls placed on them by the U.S. Securities and Exchange Commission (SEC). Individual stocks like IBM have a binary options market, but their futures and markets are very restricted. There are about 2500 securities in North America that have options trading. For the most part they are all stocks, like Intel, Cisco, or AT&T, although more than a few stock indexes and the like have binary options also.

Up until now the SEC has limited futures trading to baskets of stocks (stock indexes) like the S&P500. This market is huge and growing. In November 2002, after 20 years of turf battles and infighting, stocks began trading futures also. Of course, it’s just a matter of time until someone will shoot for having binary options on these futures. The variety of derivatives might seem overwhelming at first, but all you need remember is that there are four basic underlying assets (stocks, bonds, commodities plus stock indexes) and they are the parents of the three basic derivatives (binary options, forwards, futures). Remember: There are four basic underlying assets (with stock indexes) that can support three basic derivatives each.

All successful derivative products must fulfill some want or need of the marketplace. Unless the products are useful they slowly wither away and disappear. The three most successful derivatives are also the most basic: binary options, forwards, and futures. These three all allow for huge leverage (easy credit), offer great liquidity, and have the cachet of get-rich-quick appeal. But, of course, some things that look appealing from a distance might give you indigestion when you get too close. Delayed delivery plays to our eternal tendency to procrastinate and our hope that things will be better tomorrow. During the summer of 2003 the economists are hinging all their recovery hopes on the robustness of the consumer, a ‘‘healthy’’ consumer who continually borrows and buys. There is no clearer example of our tendency to procrastinate. ‘‘Buy now, pay later’’ is no longer just a catchy advertising phrase; it’s an American shopper’s mantra.

Another reason that certain derivatives are so successful relates to our need for fantasy and our hopes in discovering buried treasure, like those who buy lottery tickets every week. Many binary options are lottery tickets: low risk, high reward, and no chance. Our wildest dreams and our worst nightmares may never happen, but binary options exist for those who feel the need to hedge for and against those possibilities.

Binary options will definitely help you. In order to understand binary options better, read this article once more.


Street Talk

No comments present
You May Also Like
Binary Options - Comparing Futures And Forwards
The futures market is the average person’s marketplace for deferred delivery. These markets trade standardized contracts (e.g., every gold contract traded on the New York Commodity Exchange is identically the same), and they transact ‘‘downstairs’’ in a ‘‘pit’’ on Commodity Futures Trading Commission regulated exchanges. They typically call themselves futures…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
0
  Likes: 2

Binary Options - Probabilities And Gamblers
If you were a gambler shooting dice just a few hundred years ago, you were treading in unknown territory. And it was hard to find a game; there were no Vegas or Atlantic City casinos for action. Maybe that was because probability theory hadn’t yet been invented and games of…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
0
  Likes: 2

Binary Options - Getting Comfortable With Derivatives
Every day we see and easily understand real-life derivative relationships all around us. Once you get the hang of it you will see that most financial derivatives are not so difficult to grasp. While the mathematics might be daunting at first, merely getting an intuitive feel for the purpose and…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
0
  Likes: 2

Binary Options - Where We Are Headed
So, let’s spend a moment talking about the path we will follow. Using very simple analyses we will investigate and discuss options in ways similar to those uncovered by the economists who pioneered the earliest option theories. For them, at that time, many of the answers were not as clear-cut…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
0
  Likes: 4

Binary Options Tutorial
In this binary options tutorial we'll take a brief look at what these securities are, how they are traded, and what the strengths and weaknesses of trading them are. Despite the overall riskiness of these high return investments these contracts are extremely popular amongst middle and low capital investors.Short Duration…
By: Steve Wise in  Investing  >  Day Trading   Oct 25, 2011  
0
  Likes: 1

Negotiate Online Binary Options
To win some money from home, there's nothing like to negotiate the online binary options. To help you to make profitable your investments, the site gives you the secrets of the trading of binary options. You are interested in the trading of the binary options but you certainly wonder how…
By: ROBERT Damien in  Investing  >  Day Trading   Jan 01, 2012  
0
  Likes: 1

Binary Options - How to Trade the Markets
Buying and selling the monetary markets along with binary option trading is certainly easier and it has more potential to improve the earnings inside a small time period. This is actually grounds for that reason concerning the obsession for many people, each traders as well as individuals as well. But…
By: Jeanene in  Investing  >  Day Trading   Dec 08, 2011  
0
  Likes: 2

Binary Options - Greek
Delta is the most common of all the Greeks and is sometimes referred to as the Hedge Ratio Factor. Delta is generally defined as referring to the rate of change that an option will move in relationship to the underlying security. Long Call Options always have a positive delta. This…
By:  in  Investing  >  Day Trading   Nov 09, 2012  
0
  Likes: 4

Binary Options - Creating First And Second Option
Let’s see how an option might be constructed and valued with the four coin toss model. Your friend says he’d like to bet so that he only wins! (Don’t we all?) He really hates paying when he loses, but he wouldn’t be against paying a little something up front before…
By:  in  Investing  >  Day Trading   Nov 11, 2012  
1
  Likes: 2

Binary Options - Probabilities, Odds, And Payoffs
Odds and payoffs are inextricably linked together. They are versions of the same concept seen from a different point of view and, along with probabilities, they are the mathematical backbone of games of chance and gambling. They are also a wonderfully simple lead-in to the much more complex world of…
By:  in  Investing  >  Day Trading   Nov 11, 2012  
0
  Likes: 1

Binary Options Bonus Scams
One common promotion in the marketplace causing headaches for day traders is binary options bonus scams. The typical offer requires a new client to deposit a specific amount of cash in a new account with a broker whereupon the broker provides trading cash bonuses based upon the deposit. Many traders…
By: Steve Wise in  Investing  >  Day Trading   Oct 04, 2013  
2
  Likes: 1

Binary Options - Returns
Return is the preferred term for an investment’s payoff. If you watch CNBC television enough or speak to a few investment banker types, you will come to believe that returns are the only things that matter in the universe. ‘‘Return on this’’ and ‘‘return on that’’ and ‘‘year-to-date returns’’ are…
By:  in  Investing  >  Day Trading   Nov 11, 2012  
0
  Likes: 2

Factors To Consider For Selecting Binary Options Broker
With the maturation in the digital space, the binary option trading has become a vital part of the lives of the traders. Without any fear of loss, these traders are very much willing to invest in binary options trading due to its immense fellowship all across the globe. There are…
By: James Franklen in  Investing  >  Stocks   Mar 29, 2013  
0
  Likes: 0

How to Trade Binary Options
The beauty of binary options is their simplicity, which essentially amounts to picking the price above or below which you think a particular financial asset will be at a given point in time, known as the expiry. The level you choose is referred to as the strike price, and depending…
By: Fred Duckworth in  Finance   Jul 28, 2012  
0
  Likes: 0

Binary Options, What Are They?
Binary options are a new trading choice. Called "binary" as there are only two possible outcomes. Outcome 1: The pay off is either a fixed amount or percentage - up to 70% if the option is "in the money" when you sell it. Or outcome 2: You get nothing if…
By: Ian Worrall in  Investing  >  Stocks   May 05, 2011  
0
  Likes: 1

Article Views: 3152    Report this Article