Binary Option Affiliate Marketing.
So you’ve heard a few things about Binary Options. Some good, some not so good, and some just downright confusing. You may not even be sure what these are let alone how to become an affiliate or start promoting this instrument.
Good news. This article is going to solve all these questions for you and maybe a couple you didn't know to ask. It’s going to provide a definition with some easy to understand examples, you will see how and why you should be promoting binary option trading, how to sign up to an
affiliate program and you’ll even see some examples of the earning potential these programs offer.
What are Binary Options.
Binary Options are a simple financial instrument which allows anyone to trade price fluctuations in markets throughout the world - without having to own anything.
It’s easier to think of these options as a cross between the more technical financial market trading and simple gambling. You basically pick the market you are interested in, for example: NASDAQ share market or EUR/USD foreign exchange pair, decide whether you think the price will go up or down over a certain period of time and then purchase the corresponding Binary Option.
Types of Binary Options.
As these Binary Option markets have grown, platforms/brokers have started to offer different types of Binary Options.
The traditional method - outlined above, is what’s known as a ‘ High-Low Binary Option ’ and is the one we will focus on today.
Others you might come across include: ‘ One-Touch Binary Options ’ (where the price just has to touch a certain point during your specified time) and a ‘ Range Binary Option ’ (which allows traders to select a high and low to determine a range the price will fluctuate between during the course of their Option’s time frame.)
It will depend on the specific broker as to what types of Binary Options are offered so you will just need to do a little research to make sure the type you want is offered when considering a broker.
Typically, when you buy a Binary Option, you have to hold it until it finishes (or is ‘executed.’) Again, this can vary between brokers and some may allow you to exit the trade before the Option is executed but there will generally be a lower pay out or a fee associated with this action. You need to read the terms and conditions for each broker to find out their exact processes.
U.s. vs Rest of the World.
We’ll just take a second here to advise that the Binary Option market has some big differences between the US and the rest of the world.
The most important thing to note is that most foreign binary option brokers are not legally allowed to sell to residents of the U.S. unless they have been registered and regulated with the Securities Exchange Commission (SEC) or Commodities Futures Trading Commission (CFTC.)
This just means that if you are considering the idea of becoming an affiliate for a Binary Options brokerage, you need to identify where your target audience lives and thus what Binary Option brokers are appropriate for you to promote.
If you will be targeting people living in the U.S. you might want to check out some Binary Option platforms that are operating there.
A trading example.
A more thorough example of a traditional High-Low Binary Option trade including some technical terms is explained below:
Earlier I mentioned that you could think of the Binary Option as something between a straight up gamble and a fully blown financial market activity like buying shares or trading foreign exchange.
This is because Binary Options use the financial world markets as a base to calculate the ‘win’ or ‘lose’ scenario for the option. It’s like you are gambling on the price change, however, because it’s based on real world actions (and not just a dice roll or flip of a card) anyone trading Binary Options will feel more in control as they can make decisions based on research.
Binary Options are also known as ‘All-or-Nothing Options’ or ‘Fixed-Price Options.’ This is because there are only two outcomes to your Binary Option contract - you win or you lose. And both outcomes have pre-determined numbers.
Let’s say you’ve been researching about Company X. You’ve looked at their financials, read about their Board and seen some positive articles in the news lately. You decide that you quite like this company and feel it’s going to increase in value. One method for investing based on this research is to buy a Binary Option. You might purchase one stating that the share price of Company X will be above $12.54 at 3:15pm on a particular day.
You pay $100 for your Binary Option and it has a pre-agreed payout of 65%. That means that when the option is executed (or completed) - which will be at 3:15pm on the particular day you chose when purchasing it - you will either be right or wrong with your investment.
The share price will be above $12.54 as you thought, or it will be lower.
If you were right and the price was higher at the specified time, you ‘win’ (or your option has finished ‘in-the-money’) and you receive $165 back.
If you lose (finish ‘out-of-the-money) then you receive $0 back.
No matter where the price ends up when the Option is executed, you cannot ‘win’ more or less than $65 and you cannot ‘lose’ more or less than $100. Your risk and return is fixed from the outset.
Pro’s and Con’s of trading Binary Options.
The simple nature of Binary Options means it’s a great instrument to allow people to be involved in the financial world without needing to have complete understanding of how the sharemarket works or how to buy and sell foreign exchange. It’s also more interesting than simply gambling as the results are based on real world contracts and activities, giving investors more control in the outcomes.
There are no liquidity concerns, as you are not purchasing any underlying assets and platforms/brokers can create any number of different options which provides plenty of variance for traders to choose from. This also means that traders can buy Binary Options based on any asset class around the world - giving them exposure to any product desired.
The fixed price aspect of these options provides a safety net in a sense that you cannot lose more than the option cost. You cannot become liable for any further losses no matter how ‘wrong’ or how ‘out-of-the-money’ you were when the Binary Option was executed. On the flip side, your return or ‘win’ is also set to the predetermined amount. This means when trading Binary Options it’s easy to consider the risk-reward scenarios as you already know your exact two outcomes before any purchase is made.
The downside of these Binary Options are that unlike traditional options, the holder does not have any right to purchase or sell the underlying asset. This means in the example above, your investment is simply mirroring the changes in the share price of Company X - at no time do you own any shares or have the option of owning any shares from your Binary Option.
Risk Warning.
Trading in binary options is highly speculative, involves an outstanding risk of loss and is not suitable for everyone but only for those investors who: (a) understand and are willing to assume the economic, legal and other risks involved; (b) are financially able to assume the loss of their total investment; and (c) have the knowledge to understand binary options trading and the underlying assets.
How do Binary Option affiliate programs work?
Now that you know what Binary Options are and how they work, we need to learn how to sign up to act as an affiliate and how to promote Binary Option trading to your audience.
How To Register.
This is the easy part.
