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What a loser he is! If you buy the option for 100 -and you lose, your 100 is gone but the guy who is on the other side of your transaction wins. He receives an 80 payout from the broker. The broker cashes 20 no.
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This is called being "in the money." But if the price of gold is below 1,250 at 1:30 p.m., the option expires at 0. Therefore you lose the 44.50 invested. This is called being "out of the money." The bid and offer fluctuate until the option expires. You can close your position at any time before expiry to lock in a profit or a reduce a loss (compared to letting it expire out of the money). 21 In the U.S., every binary option settles at 100 or 0, 100 if the bet is correct,
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