How do Binary Options work ?
Binary Options allow an investor to take a position on whether an equity index or exchange rate will close above or below a given level on a given date.
For example, supposing Mr “A” pays ₦ 40 for a contract that states “I agree the Nigeria Stock Exchange – All share index will close above 28,000 at close of business 19 April 2010”. And Mr “B” pays ₦ 60 for another contract that states “I agree the Nigeria Stock Exchange – All share index will close below 28,000 at close of business 19 April 2010”.
At close of business, 19th of April 2010 the closing price of the index will be determined, and the customer with the successful customer position will be paid ₦ 100. The Notional amount of this contract is fixed at ₦ 100.
Mr “A”s fees + Mr “B”s fees = Notional amount of contract
What happens if the aggregate amount paid by the buyer and seller is less than the notional amount of the contract?
After the market has closed, the purchase price (fees) of unmatched contracts bought by both parties is refunded by Monchange.
What happens if Monchange is unable to find a buyer for a seller or vice versa?
After the market has closed, the purchase price (fees) of unmatched contracts bought by both parties is refunded by Monchange.
How can I buy a Contract on Monchange?
You can buy a Contract on Monchange, if you believe an Equity Index will close above
the Strike Price quoted by Monchange in either of two ways:-
• Within the “Trading Dashboard”, choose the contract you want to trade, and “Place
a new trade”.
Or
• Within the “Trading Dashboard” choose the contract you want to trade, and “Match” an existing trade in the “ASK” column.
How can I sell a Contract on Monchange?
You can sell a Contract on Monchange, if you believe an Equity Index will close below the Strike Price quoted by Monchange in either of two ways:-
• Within the “Trading Dashboard”, choose the contract you want to trade, and “Place
a new trade”.
Or
• Within the “Trading Dashboard” choose the contract you want to trade, and “Match” an existing trade in the “BID” column.
What safeguards has Monchange implemented to protect customers?
Client funds are deposited in a client account that is segregated from Monchange’s funds.
Our computer servers are secured with an industrial strength firewall, and communications between our clients’ computers and our servers is protected using Secure Security Layer (SSL) technology.