European Open – London: 07:00 GMT/02:00 EST
US Open – New York: 22:00 GMT / 17:00 EST
Asian Open – Tokyo: 0:00 GMT/ 19:00 EST
GBP/USD is a symbol that’s known in the finance industry to represent a currency pair. Currency pairs are simply two currency symbols designed to compare the differences in currency values. In this particular case, the values being compared are the Great British Pound and the United States Dollar.
Currency pairs are designed to ask a relatively simple question, “How much of the second currency mentioned in the pair can be purchased using only a single unit of the first currency mentioned?” So, in this case, the question being asked is “How many United States Dollars can be purchased using a single Great British Pound?”
Trading GBP/USD Binary Options
When trading binary options, you are not purchasing any stake in any particular asset. Instead, you make trades based on the movement in the value of the asset. When it comes to currency pairs, binary options make trades based on the movement in the value of the first currency as it relates to the value of the second currency.
With that said, when trading binary options with the GBP/USD currency pair as the underlying asset, the trader would purchase a call trade if they believe the value of the pound will increase in comparison to the value of the Dollar. On the other hand, if the trader believes that the value of the Great British Pound will lose value when compared to the United States Dollar, the trader would purchase a put option.
If the prediction made by the trader with regard to the value of the GBP/USD currency pair is correct by the end of the expiry period, the option would expire in the money; leading to payouts as high as 80% for the trader. If the prediction made by the trader proves to be incorrect upon the expiry period, the option expires out of the money and is rendered valueless.
What Makes The Currency Pair Move?
As with any other currency pair, the GBP/USD currency pair moves based on economic conditions in the underlying regions represented by the pair. For instance, when economic data in Great Britain proves that the country’s economy is improving at a faster rate than economy conditions in the United States, the value of the pair tends to rise. On the other hand, when economic conditions in the United States outpace economic performance in Great Britain, the currency pair tends to lose value.