Binary options are contracts with a risk or a reward option. When you get into this trade you definitely know that if you don’t win you will lose. It is called binary option because it is either one choice or the other, which means you either win or lose.
What most people look for is to increase the chances of winning. All other businesses follow suit but the difference between binary trading and other businesses.
While it may take months to win a touchable profit with other businesses, with binary options, you will know whether you have won within hours at most one month.
With binary option the loss is usually hard felt because you will lose all the money you hard invested. For example, iff you had invested $100, then you will go home with more money or nothing The fruits are equally very juicy and sweet. If you win, you not only win your money back but you also get a profit of 80%, which means if you had invested $100 then you go back with $ 180.
You may be wondering what you are trading to have this gain or this loss. This is how it works; you are supposed to predict whether the price of a certain asset, that is, a stock, currency or commodity is going to go up or down within a certain period. You are supposed to bet money on the prediction. The returns are usually very attractive. They range between 70 – 80%. The money you bet is your investment, and that is the money you have risked. If your prediction is wrong, all that money is lost. If you win, then you get back the amount risked and return.
All Binary Options are made up of three ingredients
This is the time between when you buy the option to the time when the option contract closes. It may take as little time as one minute and as long as one month.
This is the current price of the asset which you predicted.
The payout offer
This is the profit or the return the broker is willing to give you which is usually between 70 and 80%.
There are many types of binary options available
- Calls vs. Puts- This is the most common and refers to whether you choose up or down. That is if the price will go up or down. It is the most common type of binary option.
- Touch or no touch- A certain price is put, and you are asked if you think the actual price will reach that point or not.
- Double Touch or no double touch- This has two points with which to contend.
- Range Options also known as boundary trading or tunnel betting. This is where a price range is put, and you are asked whether the price will finish in or out of that range.
It is very important to note that
- You cannot lose beyond the amount you have traded.
- In binary trading, the minimum amount can be as little as $10
- You will pay for losing the trade by losing your trading amount.
- It is important never to invest more than you can afford to lose. For example, never invest borrowed money. This is because there is plenty of risks involved.
- It is important to note that no one ever takes ownership of the assets.
- For you to make a substantial amount of money, you have to win a majority of binary options trades.
- The trading binary option is designed in a very simple way to enable any one to trade. If you are above 18 years and of sound mind, then you are welcome to trade.
There are very many people who have become billionaires out of trading binary options. This does not mean they have won it all the time. Sometimes they lost greatly, but because of their persistence and great effort, it has earned them billions.
At the same time, there are people who have lost a lot of money in this business. Some have sold all their properties to invest hoping to win, but instead, the binary options trade has left them bankrupt. Don’t ever trade more than you can afford. Trade with brokers who give a good deal.