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On this page
  • Type of Option to Choose:
  • Trading Paris:
  • Amount to Trade:
  • Time Limits:
  • Payouts:
  • Trading Schedule:
  • An Example:
  • The guide on how to place the binary option trade:
  1. Overview

Binary Options Trading

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Last updated 1 year ago

A binary option is a type of financial option where the outcome is a fixed amount of money. In binary option trading, traders make predictions about the future price movement of a specific asset, like the price of BTC. This type of trading is simpler compared to more complex options, as there are only two possible outcomes when the chosen time period ends: the price will go up or down, compared to the set price. To learn more about the basic concepts of binary option trading, you can visit the dedicated to this topic.

In WeSwap, traders can easily pick whether they think a certain token's price will go UP or DOWN in the near future. If trades predict the right direction, they will receive a pre-calculated payout as return.

Type of Option to Choose:

There are two kinds of options: UP or DOWN.

  • UP: If a trader believes the price will go up after a certain time compared to now.

  • DOWN: If a trader thinks the price will go down after a certain time compared to now.

Trading Paris:

You can trade pairs like BTC/USD and ETH/USD.

Later on, more pairs like POL/USD, ARB/USD, OP/USD, and others will be added.

Amount to Trade:

The smallest amount you can use to make a trade is 1 USDC. The highest amount you can use is 1,000 USDC or 0.5% of the total LP pool amount – whichever one comes first.

Time Limits:

You can choose when the trade ends from 3 minutes, 5 minutes, 15 minutes, 1 hour, 4 hours.

In the next version, it will be possible to choose 1 minute and 24 hours.

Payouts:

Payouts are set to be floating according to the price trend, usually between 1.6x-1.8x.

Trading Schedule:

The trading market opens 24/7.

An Example:

Imagine Alex thinks that ETH's price will go up in 5 minutes. He decides to place an order of 100 USD. At the moment, ETH’s price is $1,600 USD.

On the trade page, Alex picks:

Trading pair: ETH/USD

Trading amount: 100 USDC

Expiration time: 5 minutes

Trading direction: UP

Assuming ETH is $1,600 USD now and the payout is 1.7x.

There are two possible outcomes:

  • If ETH is more than $1,600 USD after 5 minutes, Alex wins and gets 170 USDC.

  • If ETH is less than $1,600 USD, Alex loses 100 USDC.

The guide on how to place the binary option trade:

Investopedia page
Tutorial