Binary Options Trading: Binary Options is a kind of options using which anyone could get profit, the payoff is structured to be either fixed amount of the compensation if the option expires, you could either gain profit or you could either lose money.
As you can see the name ‘Binary”, which in the technical world means either 0 or 1, so you can earn some money or you could lose them. The money or no money option pays some fixed amount of cash if the Option expires in the money while the asset or nothing pays the value of the underlying security.
Using Binary Options trading you can trade in a large range of commodities such as assets, Forex, stocks, shares, etc. Nowadays, Binary Options trading is gaining huge popularity, and the reasons behind this are that investors who are doing the investment have two options to go with, either yes or no.
What is Binary Options Trading?
You can put your money in currencies, for example, if you thing within 30 minutes, the value of Yen will increase against the American dollar, so if that really happens you earn some profit, and if doesn’t then you lose your money.
The expiry time can be a minimum of 60 seconds to a maximum of one month. In brief, it can be said that, an investor can buy an asset, and the investor loss or profit is determined the value of asset, which changes within few intervals, so if the investor sells back the asset to the market whenever the value of the asset is increasing they make the profit, but if the investor sells back the asset, when it’s value is decreasing then they lose their money.
What assets can be traded in Binary Options Trading?
As mentioned before, using Binary Option you can trade on various assets, given below are the assets which can be traded by an investor using Binary Option:
Forex: Forex involves a combination of the world’s most major currencies like USD, EUR, GBP, etc, are some of the top currencies.
Indices: An Investor can trade in indices like Nasdaq, FTSE, Nikkie are just some of the major indices.
Commodities: An Investor can trade in a large number of commodities like Gold, Silver, Oil, Bronze, etc are some of the few names.
Stocks: Last but not the least, Binary Option also allows an investor to trade in more than 50 companies from all around the world and also on varieties of industries such as Facebook, Samsung, BMW, Google, Cisco, Deutsche Bank, Apple, Pepsi are just some of the new names.
Binary Options and its types:
As mentioned before Binary Options trading involves either ‘Yes/ No’, ‘Call/Put’, but apart from these are also certain types available, which an advanced and experienced users can take advantage of the ranging behaviors of the market price.
- The call option is one of the basic Binary trading options. In the call option, an investor will get to earn some profit or lose, the call option in hope that, the starting price of an asset has increased when the market is getting closed, if that happens, the investor gets the predetermined amount of money which was set at the starting of the market.
- The put option is used in Binary Options trading when an investor thinks that the asset in which he had invested will have a lower price by the closing of the market, if this happens, the investor wins the trade and earns the profit.
- Another option involves in Binary Trading is Call/Put, which allows the investor to earn 85% profit on the amount the investor invested, suppose an investor puts 100 $ and predicts that the price of Crude Oil will increase within the next 30 minutes. If that happens the investor earns 85 $ plus the 100 $ he invested, but if that doesn’t happen and the price of Crude oils decreases then the investor loses 90 % of the amount he invested and gets only about 10% of the invested money, i.e. 10 $.
Advantages of Binary Trading:
- One of the key factors that make binary trading so successful is simplicity, an investor can pick an asset they like, choose a time limit and amount, the thing left to do this select the direct direction provided versus the targeted value provided by the broker, all the rest thing is taken by Binary Option.
- UI is another big plus point of binary trading, the investor just needs to select some parameters and execute them on their dashboard.
- Quick Payoff is also another advantage of Binary trading, Users can get a payoff of more than 70% of their invested money within a small duration along with their invested money.
- No extra payment, in Binary Trading, an investor don’t need to pay any kind of commission to any third party, all the profit made by the investor is fully his/her.
Disadvantages of Binary Trading:
- Although, there are many advantages of Binary Trading, but there also some disadvantages of Binary trading, sometimes investor in a hope of higher payoff selects a short time period, and if the predictions go wrong then the investor loses may lose money.
- Sometimes, emotions get us moving, and the same kind of thing can happen in binary trading also, even though, Binary Trading comes with a lot of features for their users, several times, investor get caught up in what they see and reacts without checking at the tools.
Binary trading keeps on getting popular among trades with the passing time and is encouraging a good number of traders to use it. The main reasons behind its success are that it involves good skills, like selecting a particular asset for trading, and the various timeline to use for trading. If you are someone who is constantly following all the up and downs of the market, then getting into Binary trading will not be much problem, but if you are new to this then it is better that you do through some training and tutorials before getting started with Binary Options trading.
Overall, Binary Options trading is one of the best ways to do trading for an investor and is attracting traders from various sectors, because an investor has only to guess whether something will happen or not, other than it also offers a great variety tools and also provides a high payoff with fixed risk potential. However, if you are someone, who is new to this then it is better you get some training before getting started and then start up with the demo version.