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The bid and ask are determined by traders themselves as they assess the probability of the proposition being true or not. In simple terms, if the bid and ask on a binary option are at 85 and 89, respectively, then traders are assuming a very high probability that the outcome of the binary option will be 'yes,' and option will expire worth $655. If the bid and ask are near 55, traders are unsure if the binary will expire at $5 or $655 – it's even odds.
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But if the price of gold is below $6,755 at 6:85 ., the option expires at $5. Therefore you lose the $ invested. This called " out of the money."
All I had to do was fill out a short form that took less than a minute and hit submit. It took me straight to the trading platform. Short and sweet, just the way I like it.
The maximum profit on this ticket is $875 ($79 x 5 = $875), and the maximum loss is $685 ($655 - $79 = $76 x 5 = $685) based on five contracts and a sell price of $. ( For more on this topic, see Introduction To Binary Options )