What are Binary Options?
A Binary Option is a prediction on how a certain asset value will alter in a given time frame.
In order to understand the simplistic beauty of trading Binary Options, let us first take a look at the mechanics of how to investment in other trading markets.
In the traditional form of investments, the investor essentially purchases the underlying asset that they have interest in. If the investor sells at a time when the asset has increased in value, they have made a profit, adversely, if they sell when the asset has decreased in value, they have clearly lost money.
This type of investment compels the investor to constantly worry about when to sell. Binary Option trading is much simpler.
In Binary Options, you trade on the market, not in the market. Compared to the other trading methods, you are not putting at risk the entirety of your capital, as you are not buying the asset, only predicting its movement.
Trading Binary Options by way of our platform is easy, quick and reliable.
In its literal translation, the word ‘binary’ is defined as ‘having two parts’. In Binary Option trading there are only two directions for the investment. One possibility is that the price of your asset will increase; if you do predict an increase, this type of investment is termed a call. The other possibility is that the price of your chosen asset will decrease; if you predict a decrease, this type of investment is termed a put. Thus, what you need to decide as an investor is whether to call or put.
The first decision to make, in Binary Option trading, is purely what to invest in. 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 are with the Gold market, the better your chances are of successfully predicting the fluctuations in the price of Gold.
For the purpose of this example, we are going to presume that you are in fact interested in the Gold market. You then predict that the price of Gold will increase between now and the expiry time (trades vary between 1 minute up to 24 hours.) Subsequently all you need to predict in Binary Option trading is whether the price will increase or decrease, it is inconsequential by how much. The last decision that you will need to make is simply how much money to invest in this trade. You will receive a predetermined percentage of profit, depending on the cost of the Option. You merely need to elect how much you would like to invest or how much you are looking to profit. According to your prediction, you can make up to a 100% profit. As a side-note, an additional perk of Binary Options is assets are often quite cheaper, compared to what the required investment is in other trading forums.
You have currently decided upon the asset in which to invest, the amount and its direction. Lastly you wait for the expiry time, to determine whether the trade was successful.
What are the Risks?
Since there are only two possible outcomes for the prediction, basically you could either be right or wrong; it is only natural that the amount of loss or gain should be set from the beginning, which is in fact the case. This is yet another agreeable aspect of Binary Options, what you stand to lose or gain is set forth from the beginning.
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