Binary options also known as digital option is a simple method of investing in the price of an asset going up or down.
Example; if an investor thinks that the exchange rate of EURUSD will rise in value, he can take up a “up” trade, If the price is higher at the point the options expires, they will receive a payout of between 80% to 92%, but if they were wrong and the price fell, they will lose the amount invested on the trade.
- 1. Identify the asset to trade
- 2. Decide if the value will rise (UP) or fall (DOWN)
- 3. Identify the expiry time (The time the options will end)
- 4. Decide on the size of the trade or investment
After that, it is a matter of waiting to see if the value of the underlying asset does move in the expected direction. Layers of complexity can be added as a trader becomes more advanced, but those are the basic elements of trading binary options. This clarity is one of the attractions of binary options trading. Both the level of investment, the risk, and the level of returns are known as soon as the trade is taken. There is no leverage on the investment, and the specific value of the price does not affect the eventual returns.
Binary options are available on a range of different assets. Stock, foreign exchange rates (forex), indices or commodities (such as oil or gold).
There are various range of durations to chose from which the binary options will last (referred to as the expiry time). Trade from anytime frame from 60 seconds to an hour.So a trader simply needs to pick an asset, a time horizon and decide whether the price will go up or down. It’s That Simple!
- 60 seconds
- up to 92% of profit