Apprehend and Commence Binary Options Trade

Understanding binary options is not an elusive task. It is a kind of speculation in which the price of speculation is represented between 0 and 100. If the bet event goes successful, then the settlement is made at 100; otherwise, the settlement is finalized at 0 indexes. However, the price of the event is marked by the binary options brokers. If you envision that the event will occur, then the call (buying the event) option is made, else the put (Selling the event) option is accomplished. This can be best explained by the examples given below.

If you anticipate that the McDonald’s stock will close above the spot price at $80.52 within an hour, then you shall go for the binary call option and invest $100. If anticipation turns to be successful, the payout will be 70% or more i.e. $170 or more. If the McDonald’s stock does not close above the stock price, then you lose 85% of your investment and only get $15. This is the key benefit of binary options trade, as before you commence your trade, the risk of losing some percent of investment and opportunity of earning a profit is known to you exactly.

Important Concepts in Binary Options Trade

In order to perceive binary options trading strongly, understanding of following concepts is essential:

Price Barrier: It is the strike price at which the trader can purchase or sell the underlying asset.

Expiration Date: The time period in which an option closes or expires.

Types of Binary Options

Following are the different types of binary options trades, bearing same principles of trading with slight variations:

High/Low:

This type of trade is all about choosing a call or put option. If a trader assumes that stock will end up with the price above the strike price, then he chooses a Call option. And, if a trade forecasts that the stock price will show a downward trend within the expiration date, then he purchases down option. However, this may be referred as Rise/Fall trade at some trading platforms.

In/Out:

This type of trade is also referred as tunnel or boundary trade. In this kind of binary options trade, the trader sets the price range in order to trade the price consolidations and breakouts. The trader then purchases an option, predicting whether the price will abide by the tunnel, boundary, or price range that is ‘IN’, or if the price will escape through the tunnel range (OUT). Nevertheless, usage of pivot points would be a great help in such kind of binary options trade.

Touch/No Touch Options:

In this type of trade, predictions are made about whether the anticipated price will touch the price barrier or not. Particularly, in Touch binary options trade, the trader purchases an option with anticipation that the market price will touch the target price within the expiration time period. If this is correct, profit is made; else the trader is ended up with the loss. No Touch binary trade is exactly opposite to the touch binary trade. In this kind of trade, trader speculates that the target price will not touch the market price of the underlying asset. If the trader is successful with his apprehension, then the in money settlement is made and profit is generated.

What Are the Benefits of Binary Options Trading?

Even though trading binary options can present some sort of risks, it is considered as the less risky way of trading where earning high return is very fast.

Risks of Binary Options

While speaking of online trading, the trader is given the possibility to start trading with a minimum amount of money of $10 according to the trading tool chosen. The binary options risk is reduced as it gives the opportunity to the trader to invest as little as he can afford to lose. Furthermore, the brokerage platform usually clearly indicates to the traders the exact amount they have the possibility to win and the amount they will lose, prior to the investment that made. If the return or the potential loss prediction do not suit the trader, the latter will have the opportunity to change his investment to a smaller or greater amount.

Therefore, binary options trading give the opportunity to traders to evaluate the risks before they invest their money, which is a feature that other forms of financial trading do not provide. No matter how much the financial market moves, the trader will always be aware of his potential losses.

Online Trading Investment

Binary trading is becoming increasingly popular among traders all over the internet. This popularity is due to the completely different way of trading they offer. Moreover, the traders have the ability to monitor their online trading investment by trading the amount of money they want. This way of trading accepts a minimum investment of $10 per trades, making the online trades very affordable according to the trading tool chosen. Furthermore, Binary Options offer a wide range of financial assets to invest in such as Forex, commodities and stocks.

  • Forex – Which describes changes in foreign currencies such as USD, EUR and AUD
  • Commodities – Metals such as Gold and Silver, Oil and several more
  • Stocks – These are huge companies such as Google and Apple which are available in the asset list.

Fast Returns

Nowadays traders engaging on binary options platform, want to generate high profits in a relatively short period of time. Compared to other traditional financial trading methods, options trading generates a very fast return. It offers the opportunity to have a profit margin up to 85% from the initial investment made. The expiry times available on the trading platforms is relatively short depending on the trading tool chosen. For example, when using the Speed Option tool, the expiry time usually stand between thirty to three hundred seconds. On the other side, traditional trading is held for longer period of time and can go up to many years in some cases. The opportunity to trade rapidly on financial markets combined with the potential of earning high returns is one of the most attractive feature of binary options trading. If a trader succeeds to chain a few winning trades, he can make a substantial profit in less than two hours.

Is Binary Options Easy?

In order to speed up the process from the initial investment to the first trade, brokers have ensured that trading binary options are as simple as possible. Besides, there are only a few steps involved between the signing up to a platform stage and choosing the financial asset the trader will choose to invest on. Those steps also include the choice of the amount the investor wants to trade, the selection of the asset he wants to trade with and the direction he thinks the market will move by the end of the expiry time. The trader gets through all these stages in only a few clicks making binary option very easy.

Furthermore, the profit or loss the investors will encounter will depend upon the fluctuations of the value of the asset. If a trader believes the market is rising, he would place a “call.” Whereas if the trader believes the market is falling, he would invest on a “put” option. In order to ensure that a “call” option is profitable, the closing price should be greater than the strike price at the expiry time. Accordingly, for a “put” to be profitable, the price must be below the strike price at the expiry time.

Trading Accessibility

As most of the trading platforms are web-based, they can be accessed everywhere without any downloads as long as the trader has an internet connection. This availability makes it easy for the traders to regularly and conveniently check their options and monitor the financial market on a 24/7 basis. Besides, as the platform offers the access to international markets, traders can constantly keep trading at any time of the day. Moreover, the web-based platforms are now available on desktop computers as well as laptops, tablets and mobile phones which increase the trading access. The mobile application is very popular and is compatible with both Android and IOS software.

Trading binary options is the new trend nowadays. This growing popularity and notoriety in some isolated cases came from the fact that it is quite simple to get embark on this adventure that it is widely available. In order to avoid being on the wrong side of the road, the trader should, first of all, make thorough research in order to choose the most reliable brokerage firm. While speaking of binary option trading, the choice of the service provider is the hardest step for two reasons. The first one is because there is a vast amount of options trading firms and the second reason is that not all of them are regulated and will respect their promise. Therefore, this crucial choice will determine the whole journey of the trader. Once this step done, it is advised whether you are and experienced trader or not to carry out some research about the financial market and to wisely use the educational tools the platform you have chosen gave to you.

Why Online Binary Options Trading Is Becoming Popular?

A lot of traders around the world find the online binary options trading a very convenient and exciting way to earn money. Before the online feature for this form of trading was introduced, traders used to open an account with brokers offering them trading in individual markets, currencies, stocks as well as commodities. However, it was too complicated for the traders as he or she had to create various accounts to do the trading. However, things changed in 2008 when the Securities and Exchange Commission or SEC passed a judgement that the trading of these options is no longer limited to trade on the exchanges only and thus online trading of binary options was introduced.

With the help on online binary options trading, a trader can easily trade the commodities, currencies as well as stock using just a single trading platform. The principle of trading binary options online intends to make money by encountering a position in one of the two outcomes. All the trader wants to make money is that the outcome should be in his favor. This is not like other markets where the profits are highly dependent on the size of the trades and number of the pips that have resulted.

One of the major advantages of using online option for binary trading is that risk profile gets reduced considerably. As in other markets, the traders have to deal with slippages, margin requirements and other broker issues, whereas in case of online binary trading, most of the traps that hurt the trader are gone. Online binary options are a one-stop solution to all your financial investment requirements. This implies that you are not confined to just a single market but can access a variety of asset classes. There are several trade types to choose for the trader to choose from.

The pay structure of this form of trading is pretty good and can give you much higher returns. Without getting into excessive risk, you can earn a good return on investment. Also, the best part of this trading is that it can be accessed by anyone from anywhere in the world. The ease of access of online trading is also a big plus point for this form of trading. Unlike other trading options, a binary options trade can start his investment with much smaller amount and can gradually increase his portfolio as he will gain experience from the market.

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