- FXFINPRO Capital newsletter
FXFINPRO CAPITAL focuses on the most popular and simplest type of binaries, which is commonly referred to as “Up/Down” or "Call/Put" binary contracts.
With Call/Put Binary Options, the trader determines whether the price of the underlying at the termination of the contract will be higher or lower than the price at the beginning of the contract. The only thing that determines the possible gains with Call/Put binaries is the Bid or Ask price as applicable at the expiration time of the option contract.
In case of a correct forecast, the option is In-the-money and the trader receives back the paid premium plus an amount equal to the applicable Payout ratio (between 70% and 90%) multiplied by the premium amount.
In case the forecast of the trader was erroneous, that is the market price at the time of the option's expiration is lower than the strike of the Up/Call option (or higher for the Down/Put), the contract is Out-of-the-money. In this case there is no gain for the trader and they lose the premium paid. The trader may receive the Refund (% of the initial premium) in case it was specified.
Basic terms explanation
Underlying asset (base instrument)
is the asset based on which the value of the binary option is determined. By investing in the binary option the investor is actually taking the position on whether the underlying instrument will rise or fall over time. See the Underlying assets / base instruments section below for details
is the Price at which an Investor could open the short position (sell) the underlying asset (FX/CFD) at SWFX. Ask price is the Price at which an Investor could open the long position (buy) the underlying asset (FX/CFD). See Section Price Computation section below for details
is the benchmark price of the underlying asset used to define if the specific option wins or loses. The Strike Price for a Up/Down Binary Options is fixed at the moment when the option contract starts/is executed and is equal to the Ask price, of this moment, for Call options (Up option, long position) and on the Bid price, of this moment, for Put options (Down option, short position).
Note the contract is typically executed (started) in 2 seconds after the trader confirms the order. So the Strike is fixed 2 seconds after the order was placed/confirmed by the trader. See the details below.
is the time when the contract ends its life.
A Call Option
(Up option, long position) is considered In The Money if at the time of expiration the Bid price is higher than the Strike Price.
A Put Option
(Down option, short position) is considered In The Money if at the time of expiration the Ask price is lower than the Strike Price. Where Bid/Ask price is not available at the time of expiration the last available Bid/Ask price shall be used
is the amount the trader receives in case the Option is expired In The Money. It is expressed in % of the initial Amount (option premium).
is the amount the trader receives in case the Option is expired Out The Money. It is expressed in % of the initial Amount (option premium).
- The client can only trade Up/Down type. Available instruments include regular Binary Options on FX currency pairs
- The client can only trade intraday on binary option. No option will have an expiry time later than 21:59:59 GMT during winter time (20:59:59 GMT during daylight-saving time).
- The client shall preliminarily decide the duration of each option contract. The duration shall be defined in a number of hours and minutes between 1 minute (minimum duration) and 23 hours 59 minutes (maximum duration).
- A 2-seconds countdown period is applied to every instant (i.e. non-pending) option before order execution. This means that if a client requests, at 12:00:00, the opening of an option with duration 1 minute, the option contract will actually start at 12:00:02 and expire at 12:01:02, provided that execution criteria were met. It is not possible to cancel or to modify the option during the countdown period (Option is in PROCESSING status).
- The client willing to enter into a binary option contract shall preliminarily set the size of the contract/premium to be paid, which depends on the base currency the trading account.
- At any time, the client can enter into several Binary Options contracts but the total of all open contracts cannot exceed the maximum exposure limit in terms of contract size/premium paid
- Orders/contracts breaching the maximum exposure will be cancelled together with associated profit or loss (with possible delay due to manual cancellation).
- Maximum exposure limits are separately defined for every base currency in the table above. Exposure is calculated basing on the total amount of contracts in ACTIVE status, irrespective of their side (Call or Put) and underlying instrument. For instance, an active Put contract for 100 USD and an active Call contract for 200 USD build up a total exposure of 300 USD.
- Clients can open, simultaneously, several contracts on the same instrument; the number of pending and active contracts cannot exceed 100 at a time
- The trading of Binary Options shall be individual. Any voluntary or involuntary coordinating, copying or grouping of trading orders by or between several clients on more than one client account, including but not limited to the use of trading signals, messenger, PAMM technology or collective trading decisions/orders placed on several client accounts at once, is regarded as a breach of the above Trading Conditions, in particular, a breach of the above maximum exposure limits, and gives FXFINPRO Capital and its liquidity provider Dukascopy Bank the right to cancel part or all concerned trades together with their associated profits and losses, at its entire discretion. The rights described in this Section shall be in addition to any other rights which FXFINPRO Capital and Dukascopy Bank may have against the Client under any agreement or under, respectively Cyprus or Swiss law.
Underlying assets (base instruments)
Along with the currency pairs, we also provide binary options for the following instruments. These instruments are not available at the moment:Commodities
|BRENT.CMD/USD||UK Brent Oil||1 CFD = 100 barrels|
|DEU.IDX/EUR||Germany 30 Index||30 major German companies|
|FRA.IDX/EUR||France 40 Index||40 largest french companies|
|CHE.IDX/CHF||Index Switzerland 20||20 Swiss blue-chips|
|GBR.IDX/GBP||Index UK 100||100 top UK Companies as per capitalization|
|JPN.IDX/JPY||Index Japan 200+||Over 200 of Japanese leading companies|
|USA30.IDX/USD||Index US 30||30 major American companies|
|USATECH.IDX/USD||Index US 100 Tech||100 of the US largest telecommunication, software, biotechnology and computer hardware companies.|
|USA500.IDX/USD||Index US 500||Top 500 companies in US|
The underlying assets to the Binary Options offered by FXFINPRO CAPITAL are based on the underlying assets offered by our liquidity and price provider Dukascopy Bank SA (the “Dukascopy Bank”) and do not necessarily replicate or are equal to any standardized index or commodity derivative contract publicly available. Dukascopy Bank is authorized by Swiss Financial Market Supervisory Authority FINMA
The Bid/Ask prices for Binary Options offered by FXFINPRO CAPITAL are based on the Bid/Ask prices for CFDs quoted by Dukascopy Bank and are based on Dukascopy Bank’s SWFX ECN marketplace price competition technology. Each SWFX ECN marketplace participant is able to affect the price and liquidity by placing his own BIDs and OFFERs. Dukascopy Bank is counterparty for each transaction and may hedge the CFD with other clients or with external trading counterparties.
WARNING: the Dukascopy Bank’s Bid/Ask prices for CFDs are not equal to the price of the hedging instrument used by Dukascopy bank, if any. Dukascopy Bank’s CFD prices are neither legally neither economically the derivative from the hedging instrument. CFD prices quoted by at Dukascopy Bank are not a propagation of the prices from the exchanges where hedging/underlying instrument is traded and should not be considered as information from respected exchanges.
Dukascopy Bank's CFD quotes shall not be considered as precise price information obtained directly from the exchange and/or the trademark owner of the hedging instrument.
- Clients have the possibility to place pending entry options on FX currency pairs (regular Binary Options) to be executed at a specific date and time of the current week. Pending options cannot be placed for dates and times further than the current week.
- To be valid, a pending option shall contain at least: (i) the direction of the option contract (Call/Put), (ii) the concerned underlying instrument, (iii) the desired contract size/ premium to be paid, (iv) the duration the option contract shall last if open, and (v) the triggering date and time. The client may additionally, without being obliged to do so, indicate a price condition and/or the minimal acceptable base payout percentage. At the triggering time entered by the client, the system checks whether the pending option may be executed based on the conditions set by the client and FXFINPRO Capital and Dukascopy requirements (existence of available margin, absence of same-instrument options with the same maturity time, approval of the Terms and Conditions, etc.) or if the pending option shall be rejected
- Clients can cancel orders in PENDING status at any time. Orders in PROCESSING and EXECUTING status cannot be cancelled by the client
Execution & Binary Options settlement
- For regular Binary Options the strike price is fixed at the moment when the option contract starts/is executed and is based on the ASK price, of this moment, for Call options and on the BID price, of this moment, for Put options
- In order to be considered to mature In-the-money the option's underlying instrument price at the time of expiry should reach and exceed the strike price (e.g. the ASK should be under the strike for Put options and the BID should be above the strike for Call options). Maturing at a price that exactly matches the strike (but does not go under or above) is considered as an Out-of-the-money outcome
- At least one price update (tick) should happen between the moment of the opening of an option contract and the maturity of this contract. Otherwise, the option contract is cancelled without settlement (maturity without any trading gain or loss) and the premium paid is returned to the client.
- At the maturity of a regular binary option contract on FX currency pairs, the relevant price determining if the option is In or Out-of-the-money is the price of the last available tick at the maturity, including the exact time of the maturity (the level of precision is the millisecond).
- The source of the underlying FX prices is the quotations available on Dukascopy's trading platforms
- Confirmations of executions, partial fills and rejects are displayed electronically in the client reports. Dukascopy Bank may charge fees for providing any other form of confirmation and account statement, as per the applicable fee schedule
Trading Binary Options, like all other complex financial product, carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading Binary Options, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full RISK DISCLOSURE" and Risk Disclosure for Financial instruments and Investment Services