Binary options is fairly new in the stock market trading, more like in its infancy in the world financial trading arena. Binary options give the traders alternatives who are not exactly experts in the most complex financial instruments or for those who do not have the means to invest thousands of dollars on their first trade. This type of option is very feasible, especially for beginners.
With binary options, you can benefit from significant profits and at the same time, take advantage of of a minimal investment.
Since this type of trading is relatively new, we’d be giving you basic information on what you need to know to be able to trade and get started making money with binary options.
What is Binary Options?
It is a very simple contract with fixed rewards and fixed risk. This is an upcoming financial trading method where this is only the two outcomes that you would expect from it. You, as the trader, will first sign up with a platform, like Binary Uno, and then will guess if the assets will increase or decrease by the time it expires. If you guessed it right, you get the profit and if not, you’ll lose your investment minus a percentage that remain in your account. It is not that complicated. When you think that the asset will go up, you select the Up option in most binary platforms and if you think that it will decrease, select the Down option and put in your price.
It means that for the average trader, it provides instant results and gratification. This type of trading also happens in a web-based environment so that you can do it from your own PC connected to the internet. The trading is a whole lot simpler and straightforward than any other kind of financial trading out there in the market. As for the benefits, this includes instant results, a simple trade, low risk, Web-based trading, a game-like experience and a prospect for huge profits.
There are three key ingredients to a binary option trade and that is:
- Expiry Time – simply the length of time wherein from the moment you “buy” the option until it closes.
- Strike Price – the price you were able to enter the trade. This determines whether your trade will win or lose.
- Pay-out Offer – the offer of the binary option broker to you.
Is there any downside to Binary Options?
As much as it sounds extremely easy, the downside of this type of trading is that like any other market out there, if you venture into this trade without research or enough preparation, you can definitely lose money. If you treat this as a casino since it is fairly easy and fun to do, that can be also dangerous.
The risks are typically limited and pretty low, contrary to other financial markets. You will know exactly what you will get based on how much you want to invest and you can’t possibly lose more than that. Do keep in mind though, that you pay for losing trades — you lose your trade amount or the majority of it.
Now that you know the basics on binary options trading, another thing to consider as well is that you would need to find a reliable, trustworthy, dependable broker. If they offer excellent advice, the better. You will still need assistance no matter how easy this type of trading may sound. Be sure to look out for binary brokers that offer great customer service support, flexible in trading assets, and easy to navigate website for your convenience.
Would you try out binary options and add it to your investment portfolio?