# Let us look Binary Options

Up to 71% yield in an investment. Risk Warning. Trading in options is very dangerous. You can make 65-71% of in the money options or lose 85% of the out-of-the-money trade. How to do this now practically? I put e.g. 100 € for the rise of a value (call) over a strike price at a later maturity date. In a few days, hours, minutes or even seconds. If the price at the expiry time is above the base price, then you get back between 165 € and 171 €, it lies underneath the value. It guarantee a refund of € 15. The same applies if I set traps on the value (Put).

**The loss guarantee**

With the loss or refund guarantee differs the basic principle of binary options. Even if the underlying is moves in the wrong direction, the buyer will receive back 15% of its use. This loss of warranty /what a fitting name / is good, because you could have won. If you invested 85 € instead of 94 income – would be won 101%. Let us look at the roulette game. A simple chance as Red or Black features 100%, 200% and a double chance a simple number even 3,500% profit. Ensure an easy chance to win even in the probability 18/37 = 48.6%.

The gain in the Binary Options approximately equal to easy chances at roulette. At roulette systems, we have seen that in the long term, the Bank 2.7% of wagers on multiple wins and 1.35% on simple chances. It is not much, but it is a drop in the bucket!

**The height of the potential yield is meaningless**

Without the probability that a value to rises or falls, a maximum yield of 71% is saying very little. Now probably you cannot decide easily, just as in roulette on red and black, in the same time it rise and fall. So 50 € on climbing (call option) and 50 € on falling (put option) – a total of € 100. The price goes up; you get € 85.50 for the call option, and € 7.50, as a loss guarantee for the put option be refunded – together € 93. If the value, then you receive € 85.50 for the put, option and paid € 7.50 as a loss guarantee for the call option back – together € 93. It is no matter what happens you get € 93.

One moment! You had invested € 100. Why missing 7 € or 7%? These transaction costs, we can also get in any other way. If 71% of profits are high or not hinges on the probability with which we can predict rise or fall. At 100 € and use a 50:50 chance with our expectation would be € 71 * 0.5 – € 85 * 0.5 = € -7. Therefore, to generate transaction costs, so we have a greater than 50% accuracy to predict the price movement.