Binary Trading is a recent introduction in options trading, based on a fair procedure through which traders can bet on downscale or upscale on assets found on the market. There are two kinds of options in Binary Options Trading, which are the; call option, in which the trader predicts that an asset will be at a higher price after the agreed-upon expiry date; and the put option, which is used when the trader thinks that an asset’s price will decrease by the time the expiry date comes. There is no middle ground in Binary Opitons Trading, you either gain profit or lose money. One may liquidate his gains in cash or an asset, if the trading is successful and profit is made of course
One may get a payoff in an extremely short amount of time, which is the principal reason why binary options trading has become such a popular method of trading nowadays. The initial investment can even be $1, and may go up to as high as one wants it to be. The internet has certainly simplified trading, as one can simply trade in online markets, and someone can learn how to trade though online articles and guides as well. This eliminates the need for contacting stock brokers in real life.
Due to the fact that binary options trading focuses on the up and downs of a monetary instrument, a trader who forsees a share of an instrument closing above, or at, 1.374 for example, can buy a put or call option, provided that the prediction of the share price ends below that same amount. A binary contract is fixed at $100 per option.
Let’s create a hypothesis with this: a trader decides to buy 10 call options, for a financial asset that costs $1.374, and predicts that it will end at $1.400 at 15:00, and each option was bought at $25. The total cost of buying the options would be $25, and should the asset fall below $1.400, that would also be the amount that the trader will lose. Should the predicted $1.400 be met, however, the trader will earn $1,000, thus getting $750 in profit.
Thus, there are several advantages for trading in binary options:
1. No large investment needed – Depending on the assets and instruments available, one can invest a sum of as low as $1.00.
2. Short Contracts – the quicker the binary options contract finishes, the quicker you’ll get money.
3. Diverse Options – a trader can diversify his options, and bet on as much assets as he/she likes.
4. Simplicity – one doesn’t have to be an expert on stocks, the economy or finance to trade binary options. You’ll acquire knowledge as you go, and you can research market trends online with ease.
5. Predicting Gains – because of the fact that binary options have a fixed amount of money paid off, agreed upon with the initial agreement, one can quite easily predict the potential earnings and losses for the trade to take place.
6. Mobile Trading – with new technologies, such as mobile phones (particularly smart phones, laptops, PCs and tablets, one can quite simply and effectively trade online – regardless whether he or she is a seasoned trading veteran or a beginner in trading.
Binary Options Trading provides a whole new scene in which one can maximize the capacity for potential income. It is one of the easiest treading options one can use to generate income. Visit an online Binary Options Trading article or guide, and start your Binary Trading career today!