Profits Today Review Binary options are trades that have two choices and two outcomes. They are different from typical trading.
Binary options are “all-or-nothing” in design. You either win or lose. There is no middle ground. Binary means 1 or 2. One or the other.
What this means for the trader is that instead of the option payout fluctuating with the asset price, the payout is a set sum that is either earned or lost depending on whether the price of the asset falls below or rises above the strike price. The goal of binary options trader is to correctly bet whether the asset price will end higher or lower than the strike price. If you pick correctly you win the trade.
In a nutshell, binary options are ways to trade price movements of many assets with a “One or the Other Choice”.
You choose whether the price is going up or going down. Place your trade in the direction you seek and hit the ‘trade’ button. They pay out a fixed return. They also have a fixed risk. You can not lose more than whatever amount you put up for the particular trade.
You decide is the price going higher or lower? Make your trade accordingly. If you choose correctly you win and finish in the money. If you are wrong you finish the trade out of the money. The returns are large. The winning return is typically between 70-90%. Losing return is typically between 0-15%.
Binary trading is easy by design. You can read our binary trading for dummies guide which is really designed to walk new traders through the entire process of trading from start to finish. You will learn what is important to know before placing your first trade and will have the same type of setup as any active trader.
After you have successfully chosen your broker and set up your trading account, you will need to put funds into the account to begin trading. Most brokers offer customers an easy online method to deposit funds using major credit cards. Often, you are also permitted to deposit funds through wire transfer or electronic payment.
If you have questions as you begin using your account, almost all platforms offer a frequently asked questions page and email customer support. Some offer a live chat feature where you can instantly ask questions to qualified representatives.
If the world of binary options has caught your interest, start researching brokers until you find one that you feel comfortable with. In no time you will become familiar with all that binary option trading has to offer.