Even though binaries have been around for quite some time now, their popularity among traders has reached its peak in the past several years and is still continuing to attract experienced and new investors. The simplicity of trading binary options and the high return rates brokers guarantee (from 75% – 90%) make it so appealing to the ones who want to try their chances.
As easy as you may think trading binary options is you will be almost right. The essence of the binary options you must understand firstly is that with them you are just making predictions for movement of the asset price and are not buying the asset itself. This makes it a great new opportunity for investors dealing with traditional trading to make a profit. If you have a little time and you are willing to learn that is an excellent opportunity for new traders too.
As we have already said binary options have been in the financial market for a pretty long time, but not for everybody. At first they were an instrument used only by big financial institutions trading the binary options in the over the counter market.
But binary options’ star start shining just in the recent years when they moved online and became accessible to everybody. And what makes binary options trading even more appealing, except the accessibility online, is that in fact it is affordable for practically everybody. You don’t need a fortune to start trading; all you need is as little as $100 depending on the broker’s platform.
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Easy Guide to Trading Binary Options Online
Big plus of binary options trading is the simplicity. With binary options you have just two possible “exits” from a trade – either you lose money or you win money. But to get there, as the name “binary” suggests, you have to select from two possibilities – to predict if the value of the preferred asset will rise or it is going to fall by the time the binary option trade expire. If you guess right the return on your investment can go up to 90%.
But before getting there and push the “Put” or “Call” button there are few quick steps you need to take first. We will try to simplify them as much as possible for you:
- Pick the underlying asset – commodities, stocks, indices, currency pairs etc.
- Choose an expiry time and date – 30 seconds options, 60 seconds options, hourly options, daily options, monthly options etc.
- Invest – do not invest more than you are prepared to lose
- Decide up or down – or the “Put” or “Call” button
Let’s give you a possible scenario: Currency pair USD EUR, for 60 seconds, putting down $100, predicting that the price will rise. There, simple as that!
Choosing The Right Underlying Asset
In the binary options market there is a vast palette of assets you can pick from to make your guess on the price move. This includes all the major ones in the financial market.
Forex Binary Options
With these options you can make predictions on the liquidity of different currency pairs like USDEUR, GBPJPY, AUDUSD and so on. These options are the easiest for new traders.
These are the options for the most experienced traders as they have to deal with predicting the rise or fall of prices of oil, gas, gold etc. Those traders monitor the financial market closely and analyze the economic calendars professionally.
Stock options trading offers binaries for big brands and companies like Apple, Google, Facebook, McDonalds and many others.
If you don’t want to bet on individual stocks you can always choose the stock indices. Binary options brokers often offer you to make prediction for Nasdaq, S&P 500, Dax 30 and so on.
Basic Terms you Should Know
Expiration time. This is the time when you see if your trade is winning or losing and if your investment is going up or down. The expiration times can be as little as 30 seconds, but usually they are a few minutes or more. There are also hourly, daily and even monthly binary options, but the short term options are the most traded ones.
Up/Down options. Binary options trading has just two outcomes you can predict and choose between. The first one is when you bet that the price of the asset will rise. The kind of this investment is called “Call” option. The second possibility is when you decide that the price of the asset will go down or “Put” option.