From the very beginning the binary options enjoyed a big success, especially among online investors. Compared to other exchange instruments their operation is quite easy, it only requires knowing a few simple rules.
What are binary options
Binary options are a financial instrument which appeared relatively recently in stock exchange turnover. It is not yet a fully regulated market, because it has a great dynamism. Binary options trading raises a lot of controversy in the world of financiers, because some consider trading with them as a form of gambling. Due to their specific build binary options are not considered a financial instrument in all countries of Europe. However, despite the scepticism of some regulatory authorities they are publicly traded in the EU since May 3rd, 2012.
Binary options trading involves speculation about given assets, whether its value will change in a specific time frame. It can be either a speculation concerning the exchange rate, commodity prices or changes in exchange rates or stock indexes, options can apply to any market. If the investor correctly makes a forecast they could win up to 80% of the contribution, otherwise they lose the entire invested amount.
Most financial instruments profit is smooth and depends on the difference between the purchase and sale rates. Making money on the binary options is wholly different. Here there is a fixed amount of benefit for the customer, the so-called premium, it shall be paid under one condition, that is when the investor has closed positions on the in-the-money option. Keep in mind that on the options market it does not matter by which value the price of the underlying asset has changed from the exercise rate on the execution day.
When the forex market scares
Most often binary options are invested in by people for whom rules on the forex market are too complicated. In this case there is no need to know the basics of Economics to be able to earn big money. It is enough to set up an account with a stockbroker or a broker. Similarly to banking platforms one can review the demo first. This not only helps to find the best dealer but also the most environmentally friendly platform.
Simply select binary options demo account to try your hand “dry”. However, the premise of trading binary options is quite easy, so even the layman can handle it. Just keep in mind that depending on the type of option one must use a different strategy. The most common is the so-called High/Low, that is speculation whether the price of assets will increase or decrease. Touch/No touch is predicting whether the value of a good selected on a given market reaches or does not reach a certain level. In boundary options, on the other hand, the buyer selects whether the price is in the expected frame or beyond. However, in the short-term options buyer forecasts with the High / Low system, but for a very short time.
Trade to win
It can therefore be said that in many cases trading binary options is limited to pressing the up/down button and specifying the time scale and the invested amount. In the case of trade in financial instruments of this type brokerage companies and brokers often do not collect additional commissions or fees. However, one issue is the big simplicity of options trading and another is a way to earn on them as much money as possible. Here there is no middle ground or guide which will tell you how to do this, it is best to adjust the strategy to one’s actions.
Before you take a decision on how to trade options you might want to check out the current state of markets, check out the listing on the trading floor and listen to the news about the events that have taken place in the world. Often it may seem like a trivial matter on the other side of the world, but it may also affect the situation on the domestic financial market. It can be said that in stable economic times the financial markets are quite predictable. There are, however, some downward trends which have no logical basis. When investing on the stock exchange one must be alert and keep a far-reaching precaution.
The yield on the binary options tempts, because who hasn’t dreamed of return on investment that reaches even 100 percent of the contribution. However, experts recommend that beginners begin their adventure by putting small amounts of cash. Everything depends on the type of option and the market on which the investment occurs, one might want to always maintain control over expenses and adjust the plan of action to the type of assets. The value of some financial products is changing in a dynamic way, in this case, it is worth to set options on short lead times, sometimes you just need 15 minutes to make a profit. However, in the case of more stable markets situation may not change even for a few days.
No matter what type of binary options are chosen, remember that each investment is linked to a risk. It is known that with the acquisition of experience it is possible to optimize it, but never eliminate it. Even investors who trade options for a long time can lose money. Therefore it is worth it to diversify your portfolio – do not put the whole amount of funds on one market but choose some of the most certain assets and trade smaller amounts of cash.