Binary options trading

Brokers, trading signals & basics

Binary options trading

Binary options trading caused quite a stir in the world of finances in recent years – it’s still getting more and more popular, but for those who are unfamiliar with the workings of the stock market, it may be unknown – the concept, the strategies, the values. Why is it so popular, what is it essentially, and most importantly: should you be investing in them?

To put it very simply, the most common, high-low type binary options are essentially forcing the investor to make a decision about whether the market is increasing or decreasing. The time frame also plays an integral part: generally, you can opt for a time span that is to your own liking and preference, which is called an expiry date; the success or failure of your decision gets sorted out on that date.

Meaning, that if you wager that the price of your option will rise during a predetermined amount time, and, by the expiry date, it is in fact higher that the strike price was – you’ve bought a successful call, and you are to be paid your profit. (If the opposite happens and, for instance, the price is lower than the strike price was by the expiry date, you will lose your investment entirely.) If you wager for a rise in the prices, your option is called a call, and the opposite (a decrease in prices) is called a put.

It has become so widely popular because it is more or less simple: understandable even for those who have a moderate knowledge about the stock market and finances in general, and a quick way to make a considerable amount of profit.

However, you have to take into account that if your trade wasn’t successful, you not only miss out on the profit, but you lose your initial investment as well – so you’re actually at a risk of losing money. On the other hand, given the simplicity and the variety of binary options trading, it is essentially an easy and makeable manner or gaining additional profit.

If you’re only getting acquainted with binary options, we recommend opting for a demo account, which enables you to try out the process of trading without any actual risks to be taken, as it works with demo credits, not money with real value. This way you can see which broker fits you the most, and also can get to know all the different types of binary options available, to suit your needs and goals.