This can be as fast as 60 seconds or as long as a month. The majority of traders are trading the short term binary options, anywhere from 60 seconds to 30 minutes.The strike price is the price that you were able to enter the trade at and this is the price that determines whether or not your trade is a winner or a loser. In the brief example above, the strike price is 1612.75. This is the price that gold needed to close at above in order to win this trade.The payout offer is the return that binary option broker is offering to you. In the gold trade example above, the payout offer was 80 for a win and 0 for a loss. Some trades do have a return percentage for losses, typically up to 10 although this is broker and trade dependent. The payout offer is known up front before risking any money.Your risk is limited to the amount you place on the trade. Your payoff is clearly stated before making the trade. If you win a binary options trade you win a fixed amount of cash. Since there are only two possibilities, thats the origin of the name binary options.Do you think the price of x is going up or down In the screenshot above from Banc De Binary, we are looking at the current price of gold. Gold is x. The green line is the price movement of the gold over the course of time. The red section on the right hand side is the last moment you can trade this binary option. After that point, the option is closed for trading. It has not expired quite yet if you traded previously, however your window of trading is over.Those are your only two options. Hence Binary. If you pick the right choice of the two you win the trade. If you pick wrong you lose the trade. There are two choices only. Up or Down. And two outcomes, Win or Lose.That is the very basics of binary trading for dummies. It is that simple, and it is designed to be that easy. Your return is clearly stated before hitting the apply button. You will earn 72 on your investment if you finish the trade in the money.There is one more important factor left out of the simple illustration above and that is the expiration time or maturity date of the option. This is the point in time when the trade expires. This is the point when the actual price of the underlying asset is determined and you find out if you finish the trade in the money with a win, or out of the money with a loss.In the example above, 672.10 is called the strike price. Since you bet in a positive direction, we would refer to this as a call, not a put. 700.00 is the payoff value. The date and time are called the expiration date, or the maturity date. The 100 is the losing return, or a 10 rebate offered sometimes on trades. Not all binary option brokers offer rebates on trades that finish out of the money.You could also have bet in the opposite direction, that the stocks price would be trading at or below a certain lower value, which would have been a put. In that situation, you would need google to finish below the strike price. Usually, this would be a few pips below what the strike price would be if it was a call. This price is set by the individual broker along with the returns offered. It is up to the trader to take the trade or not.Example 2 Tutorial on Trading The Price Of Gold With A Touch TradeIf you want to profit from the swings in the gold market, there are hardly any better ways to do so than with a binary option. With a one touch trade, the only thing that has to happen to win is that the asset hits the 1 touch price.The payout for this trade is 70 if you finish in the money. If you win, you will get a payout of 170 which includes your 100 risked up front plus the 70 return (70 of 100 70). Since a 70 return is a bit low on the payout side, the broker offers a 15 rebate on losses. If you lose, you get 15 back and only lose 85 instead of the full 100. You can see how this can offset the lower than average return for wins.Luckily for you, there was a some negative news regarding the dollars value that drove fears of inflation. The price of gold and oil went up accordingly. When the news broke, the gold price spiked up and hit your target price. Triggering your trade to close in the money. You were paid 170 which includes your 100 bet up front plus the 70 return on your investment. You can trade one touch options at sites like 24option, not all brokers offer them even though they are the 2nd most popular form of binary trading.Binaries are one or the other choice with a one or the other payout or loss. Winning returns average 70-85 at the respectable brokers for most trades. If you lose, you get between 0-15. Some brokers kick back some percentages on losses, thats why their winning returns are sometimes a bit lower compared to the other brokers.If you know what a binary option is but would like to learn how to get started trading binaries then jump back over to our page focused on the things you need to know to start trading. This page is more a basic overview of what is going on when talking about binary options.However, to be a long term winner you have to develop a method and strategy that works for you. You have to consistently profit by winning more trades than you lose. Since there is risk involved, that means that you need to create a method to succeed. You can do that by studying up on our tips and strategies to win and practicing with a no risk trading account. We also recommend learning the basics of candlestick chart reading in order to judge price action.If you are ready to take the next steps and learn more about binary trading then jump back to our Binary Trading Guide list of lessons. To continue reading through the lessons and tutorials. You certainly want to learn to read a candlestick chart as well as find the right broker to trade with. 2015 - BinaryTrading.org, All rights reserved. Sitemap Binary trading carries significant risk. Never invest more than you can afford to lose. This site is not financial advice or any offer of financial advice. This site is for entertainment and informational purposes only. By use of this site you agree to hold us 100 harmless for any and all loss. Clicking on links to external sites may result in affiliate income for the publishers of this website.