What are Binary Options Trading?
Binary options trading is a type of trading that require you only to predict the direction of the price movement. If your prediction is correct at the time of expiry, you will receive a fixed payoff. If your prediction is incorrect then you will lose your initial investment and will not receive any payoff. It’s as simple as that. Binary options trading are some of the simplest trading options that are available because as a trader you know exactly what you stand to gain, and what you stand to lose. This is not the case with forex for example where losses can be difficult to predict.
How Do I Do Binary Options Trading?
When trading binary options, you will need to place a “put” or “call” option. A put option means that you predict the price of an underlying asset will decrease from the current price at the time of expiry while a call option means you predict the price will increase. If your prediction is correct, you will finish in the money and make a profit, usually of between 75%-85% of your initial investment. You will finish out of the money if your prediction is incorrect. Sometimes your trade will finish at the money which means the price of the underlying asset is the same as the time of expiry and at the time you opened the trade. If this happens you will usually be given your initial investment back.
Advantages of Binary Options Trading
• Simplicity – you just need to decide if the asset will close below or above the initial price.
• Binary options are straightforward and easy to understand.
• There is a limited amount of risk and a fixed payout.
• Binary options offer a simple way to hedge your portfolio.
• You can generate a profit from a binary options trade even if the price of the underlying asset changed by a single pip.
• Binary options can be a very effective tool to hedge any current positions.
• Binary options are issued 24 hours a day, 7 days a week which allows investors to trade on a variety of different time frames. Binary options are available on many global underlying assets from many different exchanges.
How to Get Started with Binary Options Trading
To get started with binary options trading, you need to register your free account on BossOptions to start trading and you will get your first investment doubled instantly. No experience needed.
BossOptions is a premium provider of online binary options trading. Whether you want to trade forex, trade stocks or bid on the price of common commodities like oil and gold, they are your perfect trading partner. In addition to their trading platform which puts you in touch with the markets directly, BossOptions houses a knowledge centre dedicated to helping you with everything involved in how to trade binary options from, start to finish.