What is Binary Options Trading?

What is Binary Options Trading?

In Finance World besides Stock Markets and Forex, Binary Options Market is a new trend for the investors and it is growing rapidly in the whole World. Everyone who is interested in financial investments is talking about Binary Options. But “What is Binary Options?“, “How can you trade Binary Options?” It is actually much easier comparing to Forex and Stock Markets.

Binary Options Trading is a new form of financial investment which became legal in 2008 and has seen enormous growth and success over the years.It is also known as Digital Options Trading.

There are lots of ways of making money on investments online and Binary Options is one of them. Everybody wants to make money by trading binary options but this is only possible with a good analysis and understanding of the assets you will trade with. Therefore, it is significant to have a background knowledge of an asset and it is a good idea to review the complete list of available assets and then select the one that you feel most comfortable with.

Once you decided to trade Binary Options you need to register with one of the reliable brokers in the market deposit the amount you would like to invest.However even before depositing real money, you can open a demo account and learn how it works by practicing. Most of the Brokers have demo accounts for the beginners and these platforms are very useful for the investors in order to prepare them for real trading.

After you decided to trade with real money you should choose an investment asset which you are interested in. The rest is very simple and based on a yes or no proposition. You only need to know  whether the asset will be above or below a certain price at a certain time.

For instance: Will the price of oil be above $74 at 3.30 pm? If you think it will be above $74 at 3.30 pm you buy the binary options and if you think it will be below you sell the binary options.

Let’s understand the issue more clearly. The price of a binary option is always between $0 and $100, and just like other financial markets, there is bid and ask price. Let’s assume the binary is trading at $44 bid and $46 offer at 3.00 pm. If you buy the binary option then you will pay $46, if you decide to sell then you’ll sell at $44. If we imagine that you decided to buy and if after 3.30 pm oil is above $74 then your option expires and it becomes worth $100. You make a profit of $54 (100-46). This is called being in the money. But if the price of gold is below $74 at 3:30 p.m. the option expires at $0 and you lose the $46 you have invested. It is as simple as that.

You can find the categorical lists and reviews of best binary brokers on our website.

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