How trading works

This page explains, from the beginning, what you are doing when you place a trade on xeoption.com. Every section starts with the plain version and goes into detail after it, so read as far as you need.

1. What a binary option is

A binary option is a short trade on where a price will be. You pick a market, say whether the price will end up above or below something, and wait for the window you chose to close. If you were right, you win; if not, you lose.

The most you can lose is your trade amount, and what a win adds — your Profit — is shown before you place the trade. Nothing is held open afterwards: the trade settles itself when the window ends.

In more detail. The result is settled from the market price feed, never from a draw or a house random number. Because the Profit is fixed when you place the trade, it does not change if the price moves while the trade runs. A trade cannot be cancelled or edited once it is confirmed.

2. The three contract types

The contract type decides what your trade is measured against. All three are open to everyone, and you can switch between them on the trade screen at any time.

Rise/Fall

The rule: will the price at the end be above or below the price when your trade opened?

Choose Rise if you think it will finish higher, Fall if lower. Example, with a trade amount of 10 and a 30-second window, which shows +88% Profit:

• Win: you pick Rise; the price opens at 84,100.00 and closes at 84,120.50. You win 8.80 of Profit and get back a total return of 18.80.
• Loss: you pick Rise; it closes at 84,090.00, below where it opened. You lose your trade amount of 10.
• Refund: it closes at exactly 84,100.00, level with the open price. Neither side wins, and your trade amount of 10 is returned.

Higher/Lower

The rule: will the price at the end be above or below a target price that you pick?

Choose Higher if you think it will finish above the target, Lower if below. A target further from the current price is harder to reach on its side, so it shows a bigger Profit. Example with a trade amount of 10 and a target price of 84,110.00, showing +120% Profit on Higher:

• Win: you pick Higher and it closes at 84,120.50, above the target. You win 12.00 of Profit, a total return of 22.00.
• Loss: it closes at 84,105.00, below the target. You lose your trade amount of 10.
• Refund: it closes at exactly 84,110.00, on the target. Your trade amount of 10 is returned.

Touch/No Touch

The rule: will the price reach a target price at any moment before the trade ends?

Choose Touch if you think it will reach the target before the trade ends, No Touch if you think it never will. Each target price shows a Profit for both sides: a target further away pays more on Touch and less on No Touch. Windows run from 2 minutes to 1 hour, and the contract is offered on crypto only. Example with a trade amount of 10 and a target price of 84,150.00:

• Win: you pick Touch and the price reaches 84,150.00 at 14:02:31, before the trade ends. You win your Profit and get your trade amount back. (Had you picked No Touch, that would have lost.)
• Loss: you pick Touch and the price never reaches 84,150.00 before the trade ends. You lose your trade amount of 10.
• Refund: only if the trade cannot be measured — see the refund cases below. A price landing on the target is a touch, so there is no draw.

3. How a trade is measured

Your trade is measured from the open price and settled on the close price. You see both on the result.

In more detail.

• The open price is set a few seconds after you click, from the first whole second after it, so it is never a price you had already seen. Your trade amount, any target price and your Profit are fixed before it is set.
• The close price is the market price at the moment the window ends. It is the combined price across every exchange the provider merges, never one exchange's own price.
• A Touch trade is decided on contact: the price only has to reach the target once, and the trade is settled then, without waiting for the window to end.
• Your trade amount is refunded when the price closes exactly level with the open price (Rise/Fall) or exactly on the target price (Higher/Lower), when the market closes before your trade ends, and when no price was published for it. The result says which one happened.

4. Windows and profit

The window is how long the trade runs, from 30 seconds to 1 hour. On Rise/Fall, each window has its own Profit.

In more detail. On Rise/Fall every window has one fixed Profit, shown beside it on the ticket. The figures below are examples to show the shape, not a live quote: the ticket always shows the current one.

On Higher/Lower and Touch/No Touch the Profit depends on the target price you pick, not only on the window. The less likely the price is to finish above a target — or to reach it — the more a win adds, so a harder target pays more and an easier one pays less. The ticket lists each target with its Profit before you choose.

Profit percentages are always rounded down to a whole percent, so a quote never promises more than a win is paid.

5. The words you will see

Trade amount

What you put into a trade. You lose it on a loss and get it back on a refund.

Profit

What a win adds on top of your trade amount, shown as a percentage before you trade and as money on the result.

Total return

Your trade amount plus your Profit: what is credited to you when you win.

Open price

The price your trade is measured from.

Close price

The price your trade is settled on when the window ends.

Target price

The price a Higher/Lower or Touch/No Touch trade is measured against.

Distance

How far the target price sits from the open price, as a percentage. It is what you choose when you move the target, and it is what sets the Profit.

Binary options are high-risk and you can lose your whole trade amount. Read the Risk Disclaimer before you trade.