What is binary options? Binary options are a type of options with fixed payout and fixed expiry time, it is an estimate of underlying assets performance during a given time frame. Trading binary options is based on accurate prediction of price movement of a particular asset. With binary options, there are two possible outcomes: Call and Put Option.
Call option is made when traders predict a price increase of an underlying asset. Put option is made when traders expect that asset price will decrease below the strike price in predetermined period of time.
A good attribute of binary options trading which has contributed immensely to its global popularity is the fact that all sorts of all traders from novice to experts can join and start trading, regardless of their trading knowledge. This is a great opportunity for both beginners and professional traders to find their place in binary options industry.
There are dozens of reliable binary trading platforms where traders can perform their trades. Reliable brokers provide traders a wide selection of useful tools and services that lead to a profitable binary options journey.
With binary options, traders can achieve large returns on investment, which is a great way for all traders who want to profit from this rising online trading industry. Also, traders can choose if they prefer to invest in short term or long terms options, depending on their risk exposure preferences.
In various forms of investment the traders buy assets they invest in and either keep it for a while or sell out immediately with the value of the profit and loss being determined upon the changing value of the asset. If the investor sells the asset back to the market whenever its value increases then they're making a profit, and if they sell the asset back to the market when its value decreases, then their money is lost.
With this form of investment the investor has to be constantly active concerning when to sell the asset and get out of the market to avoid exposing his entire account to the market’s volatility. Therefore binary options trading is simpler.
In options trading is made on futures on the market as opposed to other trading methods, and thus the amount of mental stress isn’t expressed, as you are just predicting the asset's movement for a predetermine time frame.
The word binary stands for two parts. Generally speaking, all you need to do is predict either “Call” or “Put“. Binary options trading has only two investment possibilities for you to predict and then choose between.
One investment possibility is expressed when you predict that the price of the asset will rise, this type of investment is named “Call” option. The other possibility is presented when you predict that the price of the asset will fall, this type of investment is named “Put” option.
Choosing an asset is the first step of your investment. For instance, if you have an interest in gold prices, you may choose to place a binary investment in gold. Obviously, the more familiar you're with the gold market the better your chances are of successfully predicting the fluctuations of gold prices.
These assets can be traded on binary options market:
- Indices - Such as Nasdaq, Dow Jones, FTSE, Nikkei, S&P 500, DAX, CAC 40, etc.
- Forex - Combinations for all the major currencies such as USD, EUR, GBP ,JPY,AUD etc.
- Commodities - they include Gold, Silver, Oil, Corn, Coffee and several more
- Stocks - Google, Deutsche Bank, Coca Cola, Facebook, Microsoft, BNP Paribas, Nike, etc.
The types of Binary Options includes the following:
- Range Options- Range is a type of binary option where instead of predicting a specific price by the trader, he gets to select a price range. If the binary option enters that range during the time frame of the option, the investment would be profitable. However, he must accurately predict whether a price of a specific asset will indeed expire in or out of the predetermined range.
- One Touch Options- This type allows traders very large returns on investments. All that the trader has to do is predict whether a price of a certain asset will reach a specific and predetermined level prior to its expiration time or not.
- High/Low Options- This is the most popular form of binary options among binary option traders. aka “Vanilla Options”, this type of options allows the trader to place a standard “Call” or “Put” position within the market on a selected underlying asset with no distinct features.
Quick Options- With this a trader completes a trade from start to finish in 30 seconds. Other time increments that are available in this feature include 60 seconds, 5 minutes, 10 minutes, 30 minutes and 60 minutes. Mainly suitable for traders who are looking to get instant returns on their investments.
Now that you have the basic information on what binary option trading entails and are interested the next thing is to visit and sign up for a trading platform of your your choice.These platforms are the interfaces where you make your trades. Majority of Binary Option Brokers make use of trading platforms which includes SpotOption, AnyOption, Tradologic, TechFinancials. Brokers provide host for these trading platforms allowing traders to execute their trades. Before trading binary options you must sign up with a Broker.