# Binary Options Exchanges vs Brokers Part 1

My experience in a Binary Options Exchange: Part I

First of all, I will explain some basic things you must know for trading in a binary options exchange.

Price of the assets: I will explain this with an example. If you open a binary options exchange platform and you want to trade for example “EURUSD 5 minutes up” product you will see two prices.The first one is the price for buying the asset because you believe that the next 5 minutes Euro will rise. In this case, if the euro will rise finally and you win, your trade expires in 100.If euro will not rise your trade expires in 0.Now, how you can calculate your profit.Let’s say you buy the product in the beginning of the 5 minutes when the buying price is the most of the time around 50 euro.

– win: 100 – 50(the price you bought the pair)=50

-lost:   0 – 50 = -50

The second price is the price for selling the product because you don’t believe    that the euro will rise in the next 5 minutes. So, you are selling the pair in the beginning of the 5 minutes 50 euro.

–     win(euro didn’t rise): you earn 50 euro

–     lost(euro rise): 50 – 100= -50

Strike Price: Let’s use the above example. EURUSD in the beginning of the 5 minutes it’s 1,29000.This is the strike price and you should predict if the pair expires above or below.Be careful, let’s say that the “EURUSD 5 min up” opens at 9:00. The expiry time is 9:05. If you buy the pair at 9:00 or at 9:02 or at 9:04 the strike price remains the same, 1,29000. The factor which changes is the price you will buy the pair in different times. For example, if you will buy the pair in the beginning of the 5 minutes, the price will be normally 50 euro because the pair has 50% possibility to rise or to fall. If you will buy the pair at 9:04 and the price is already 1,29054 you will buy the pair more expensive for example 70 euro because now EURUSD is very very possible to expire above 1,29000(asset strike price) and  only one minute left for the expiry. If you buy the pair 70 euro:

–     win(above 1,29000): 100-70= 30

–     lost(the last minute the pair dips below 1,29000): 0- 70 = -70

Kind Regards,

Kostasze

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