Forex trading is one of the ways to make money fast and easy. Second choice is to trade binary options, because there is no faster way to make money than the hourly turnover in the binary option market.
A binary option is an option that pays a fixed amount or nothing, whether a certain condition is fulfilled when the option expired. These types of options are also referred to as all-or-nothing options, since it is a type of option where the payoff is all or nothing. The return is therefore fixed and it comes to no surprise that such options are also known as: FRO’s-Fixed Return Options,Digital Options is another common term. More simply put all a trader needs to speculate about the direction of an instrument and decide whether the underlying asset price is going up or going down without taking other factors under consideration.
Binaries considered to be one of the simplest trading products out there, as the constructed investment product the trader know at the time of the trader what is the maximum profit and loss. Binary options trading is the best online trading option available to earn good money in a short period of time.
A binary option trading is the best online trading option available to earn good profit in short time. It is a type of online trading in which a buyer agrees to enter in a contract to buy or sell an underlying asset in the future. The buyer does not store the asset; he does not purchase the asset in real. The buyer places an order to purchase or sell an asset at a fixed price at a pre-determined time and the order is executed as soon as the price of asset becomes equal to the fixed price. The fixed price quoted by the buyer is called the strike price. The contract will expire if the pre determined time is over and will not be executed after the contract has expired.
In Binary options trading, you can earn profit only if the price of asset changes according to your predictions before the contract expires. In these types of trading options, there are two possible outcomes. Either the order is executed before the contract expires and the owner or the buyer receives the desired payout or the contract expires before and the buyer does not receive profit but loose his money. So the risk of loosing money is also associated in the binary options trading online. The traders can only benefit in these trading transactions if their predictions are more accurate. Not studying the previous trend can be harmful so strike price of any asset should be decided only after detailed study of past trend.
The important aspects to this type of trade are the underlying asset, expiry time; strike price and the direction in which the price of asset will move. The underlying asset in the binary trading option is the item that is used for trading. Traders order these underlying assets to gain profit. The underlying assets could be currencies, commodities, stocks or indices. The expiry time is the time after which a contract expires. Expiry time can vary from hours to months. The buyer is responsible to decide the expiry time. The strike price is the price at which the underlying asset is purchased “Strike price is controlled by the buyer”. The price of an asset movement is the last important aspect of binary trading options but the price movement of assets cannot be controlled by the buyer.
The binary options trading have two options, the call option and the put option.
Call option, the direction of the asset moves up
Put option, the direction of the asset goes down.
The buyer places the Call Option if he expects the price of the asset to rise above the strike price before the expiry time.
The buyer places the Put Option if he expects the price of the asset to decrease and not rise by the end of the expiry time.
The price movement cannot be controlled by the buyer; you have to have accurate predictions to earn high profit.
In the Binary Trading Options, the buyer is always aware about the possible profit or loss from the trade because strike price is fully controlled by the buyer.
The traders can do binary options trading using a Binary Options Trading Platform.
Traders should use 100% web based platform and don’t require software to be downloaded to ensure a smoother buying experience because there are no software updates are needed and purchasing can be made from any computer. The online trading platform should be easy to understand for beginners. The trading platform should support maximum assets. Accuracy of settlements.
The trading platform should have used the most advanced technologies to facilitate secure transactions and provide satisfaction to their customers. To find out about a reliable binary options trading platform, you have to do your home work buy searching and reading reviews or comments posted by other users and you should join one with no dispute or at least should have a minimum dispute.
Common Terms Used In Binary Option Investing
Strike Price: This is the price of the underlying asset when the initial investment is made. This determines whether you are “in the money” or “out of the money”.
A call option, often labeled a “call”, is a financial contract between two parties, it is the binary option that will expire “in the money” when the underlying asset is above the strike price at expiration. It will expire “out of the money” when the underlying asset is below the strike price at expiration.
put option is a contract between two parties to exchange an asset.
This is the stock, commodity, currency pair, or index on which you are basing your option. This is the basis for the entire binary option.
This is the point at which the option will either pay, or expire in a loss. This is when the underlying asset must be higher to end in the money on a call option, or lower to end in the money on a put option.
By: Adma Dababneh