24Option Trading Tutorials Part 1

Types of Binary Option Instruments

24option offers a variety of financial options for trading binary options. Each option has
its unique benefits that you can use depending on the market and your preferences.
High/Low – High/Low binary options are written with target rates around the prevailing
market price. You can choose whether the market price will close higher than the
current price or lower.

One Touch – Touch and No Touch binary options are options where you decide if the
market price will reach a certain amount or not before the expiry time.

In/Out Boundary – In and Out Boundary options have both an upper and a lower
target price that form a boundary range. These instruments’ outcome depends on
where the market price is at the option’s expiration compared to the boundary range.

24option types of options

Returns and Refunds

addition, the following possible outcomes pertain to all of the three types of option
instrument:

In the Money or ITM – Options that expire ITM typically have returns on the order
of 70% of the amount invested. This means that for every $200 invested, the amount
returned when the option is ITM would be $340, or the initial investment plus $140.

Out of the Money or OTM – Options that expire OTM typically refund 15% of the initial
investment. Accordingly, for an initial investment of $200, the refund will be $30 if the
option expires OTM.

At the Money or ATM – Options that expire ATM result in a complete return of the
amount invested to the client. As a result, if $200 is invested in an option that expired
ATM, the return on this investment is $200.

The following section contains a more detailed explanation of each of those possibilities:

1. ‘In the Money’ Expiry

This term means that the option is beneficial for the holder to exercise. Options that
expire “In The Money” or ITM are those that show a profit for the client at expiration.
When trading via the 24option website, options will expire ITM under the following
circumstances:

High/Low Binary Option:

• High options expire ITM when the market at expiration is higher than the target price.
• Low options expire ITM when the market at expiration is lower than the target price.

Touch or No Touch Binary Option:

• Touch options immediately and automatically expire ITM if the market price reaches
the option’s target price at any time before expiration.
• No Touch options expire ITM if the market price never reaches the target price prior to
expiration.

In or Out Boundary Binary Option:

• In Boundary options expire ITM when the market at expiration is within their boundary
range. This means the market is above the lower target price and below the upper
target price.
• Out Boundary options expire ITM when the market at expiration is outside their
boundary range. This means the market is below the lower target price or above the
upper target price.

2. ‘Out of the Money’ Expiry

Options that expire “Out of the Money” or OTM will yield a net loss for the client, but
may still return some percentage of the investment back.

When trading via the 24option website, options will expire OTM under the following
circumstances:

High/Low Binary Option:

• High options expire OTM when the market at expiration is lower than the target price.
• Low options expire OTM when the market at expiration is higher than the target price.

Touch or No Touch Binary Option:

• Touch options expire OTM if the market price never reaches the target price prior to
expiration.
• No Touch options immediately and automatically expire OTM if the market price
reaches the option’s target price at any time before expiration.

In or Out Boundary Binary Option:

• In Boundary options expire OTM when the market at expiration is outside their
boundary range. This means the market is below the lower target price or above the
upper target price.
• Out Boundary options expire OTM when the market at expiration is inside their
boundary range. This means the market is above the lower target price and below the
upper target price.

3. ‘At the Money’ Expiry

This term refers to an option with a target price at the same level as the market price
at expiration. When options expire “At The Money” or ATM, 24option will return the
amount initially invested to the client.

When trading via the 24option website, options will expire ATM under the following
circumstances:

High/Low Binary Option:

• High options expire ATM when the market at expiration is the same
as the target price.
• Low options expire ATM when the market at expiration is the same as the target price.

In or Out Boundary Binary Option:

• In Boundary options expire ATM when the market at expiration is at one of their
boundary levels, either the lower target price or the upper target price.
• Out Boundary options expire ATM when the market at expiration is at one of their
boundary levels, either the lower target price or the upper target price.

Expiry Level

The expiry level is the price determined by an option’s underlying market that is used
to compute an option’s value at expiration for High/Low and In/Out Boundary binary
options.
Additional details about how the expiry level is calculated can be found by clicking here:
Expiry Calculation.

The Option List

The Option List section of the ‘Trade’ window lists the assets for which binary options are currently available from 24option. The type of asset and the order that the assets are displayed in depends on the user’s preference, as well as local and supplier preferences.

Clients can use pull down menu filters located at the top of the Option List to select and
sort assets and their available options. Selection criteria include:

1. Market:

European Stocks • U.S. Stocks • Forex • Commodities

2. Symbol:

EUR.USD • GBP.USD • AUD.USD • CAD.USD • Gold, etc.

3. Expiry:

Intraday • End of the day • End of the week

Instead of the available options appearing in boxes, the Option List can be shown as
vertical list as illustrated in the picture below. You can do this by clicking on a toggle
button located to the right of the aforementioned selection criteria pull down menus.

Individual Binary Option Details

By clicking on an individual binary option displayed in the Option List you can view its
additional details in the upper portion of the screen in and around the Trade Box as
shown in the following screenshot:

These individual option details include the following:

Asset Symbol – See the asset index for currently available underlying assets.

Target Price – This is the strike price at which the binary option is written by 24option.
Target Prices change frequently, and two such prices — one upper and one lower —
are involved in Boundary options.

Market Price – Where the current market in the asset is trading.

Price Graph – A chart of the asset price versus time, including the target price(s), the
time remaining until the option’s expiration and a shaded region indicating the area of
profitability.

Return – This is the percentage return on investment clients can expect if the option
expires “In the Money”.

Available Option Types – This could be a Low Option and a High Option for a High/
Low binary option, for example. Option symbols can be clicked — e.g. click the ‘+’
sign for a High option or the ‘–‘ sign for a Low option

Expiration Time – The time at which the option expires.

Time Until Trading Closes – This countdown appears as the final chance to purchase
the option approaches. It represents how much time is left until this option can no
longer be purchased.

Click to continue reading about 24option trading tutorial part 2.

Bonus Video – 24Option Platform Review

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Author: David Wilson