Binary Options And More

Binary options are among the simplest financial trading methods that are based on where the foreign exchange or forex markets are heading in a certain time period. They comprise of contracts that pay out either a fixed amount or nothing at all when the expiration time is over. The payout amount various in each case. Like other strategies, binary options are also based on strike prices, expiration rates and underlying securities.

There are plenty of brokers and plenty of options. It’s best to stick with reliable brokers only and we really mean that. There are lots of brokers you can’t trust but luckily, we have been testing brokers for years now and can confidently recommend 24Option, world’s leading binary options broker. If you don’t have an account there yet you should not hesitate to open one. Click here to do so!

Payout %

Explaining the Trading Strategy

A Binary option trading is a forecast for the prices of various financial instruments. As a trader, you will have to decide if the price of an asset is going to increase or decrease after a certain time period has passed. If your predictions are right when the time period is over, you win the trade; otherwise you lose it. This is the reason this sort of trading has been termed binary options because there can be only two possible outcomes. Either you win or you lose.

Binary Stock Options

A binary stock option is just a contact between a seller and a buyer that provides both of you with a right to buy or purchase an asset at a determined time which lies in an agreed period. The contract can be of any period that ranges from an hour to a month. Some markets will even allow you to purchase shorter term contracts that last only for five minutes. You should be aware of your contract length in order to make accurate predictions.

There are several web based trading platforms that allow investors to trade in the forex market using the binary option strategy. In addition to this, there are also several renowned brokers from which you can appoint anyone who seems apt for your style. Every broker offers different types of assets, expiration times and investment returns. Generally, trading assets include stock, commodities, indices and currency pairs. The investment returns range from about 65% to 95%, and the expiration time can be anything in between a day and a minute.

Other than this, there are several other features as well such as Range Binary Options and one touch, but these would vary with your chosen broken. You can also avail bonuses that let you win increased amounts of money.

Trading Binary Options

Trading binary options is simple and can easily be executed in four basic steps.

  1. Select an asset
  2. Choose an expiration time
  3. Select a direction for your chosen asset
  4. Select the amount of money that you would like to invest
  5. Submit the trade, and then wait until the expiration time is over.
  6. If your chosen asset is higher than the target price, you win the trade. If not, you will lose the money which you invested.

Tips for Success

  • Study the trends in the market so that you can easily determine the right time to get out of a position. For instance, you have silver as an asset with a price of $75. You believe that the rates of silver will decrease after the expiry. So instead of holding onto it, just sell it at suitable rate before the position closes so that you can minimize the loss to the largest possible extent.
  • Learn how a binary option price is interpreted in the market. This will help you analyze if your chosen strategy will let you win or result in a loss.
  • In the forex market, risks and rewards are related, and the same is the case with binary option strategy. The higher the degree of the risks involved the more rewards you are going to earn. As such, you should be able to weight your contracts based on these two main matrices, and then open or close your position. For instance, you observe that USD is becoming more important than YEN. You will then have to take steps to protect your Japanese investment. Accordingly you should buy a currency pair with a suitable rate that will let you turn the scenario into a win situation. But this will only happen if your analyses are correct.
  • Binary options are largely based on the assets involved. Make sure you understand them and gain familiarity with the markets where they are traded. Before you start trading you should read on at MFIConnect or take a look at a couple of other binary options sites like Investopedia (for definitions and basics), at Tradingbrokerz (especially relevant for mobile trading) and at this interesting article at Forbes that makes you think.