Binary options are one of the fastest forms of trading that have ever existed. Tension is particularly high when you can open and close positions within a few seconds. In fact, it can go so fast on the binary market, that some claim that it should be classified as gambling. Though it is not true. Despite the similarities with casino games and betting on them is still a real form of investment, albeit an alternative one.
- Call option / purchase – If you think the price of your asset will rise, you buy a call option, it is also called the purchase option
- Put option / sell – If instead you think the price of your asset will fall as buy a put option also called put option
- Touch / one touch – If you know that the price of your asset will reach an exact price, you choose a touch option. This option allows you to profit as long as the price moves in your prediction sometime during the time period
- Boundary – The last one is the boundary option, your task is to choose two awards that you believe the underlying asset will fall between
What we like about binary options trading is the fact that it is more appealing to people who normally might not have the patience to invest in long-term equities. Hardcore traders who are looking for a faster option of combining their usual trading with are who the binary options are meant for.
Is Binary Options A Scam?
Before we go into detail about how to deal with binary options trading, we should first investigate whether binary options is legit or not.
We suspect that you have probably heard from others that binary options are a bluff. You may have read an article about it online or heard it from a colleague. “You can not make money through that kind of trading” is something we hear all too often.
So let’s clarify that this is not true and it is not a scam. We would never deal with it ourselves, or recommend it to others if it were not for real. For those who can keep a cool head and develop strategies look no further. The only reason that this form of trading has received a gank bad reputation is that the brokers without licenses have been deceiving customers since the industry was very young. All brokers that we recommend are obviously licensed to trade in binary options.
It is important to use a reliable broker to ensure that they are just as safe as other forms of investment. There are of course risks associated with the binary options, just like all other forms of investment, but it is certainly no hoax. Should you read our comprehensive guide, you will better understand how the market works before you get started, and thus avoid some of the risks.
How Does Binary Options?
Binary options are a speculative form of investment where your task is to predict price changes. When you undertake in the trading, you are simply speculating the direction in which the price of an underlying asset will take. Will the price of gold may be higher or lower in 10 minutes?
If you end up being right and are “in the money” you get back the amount invested plus a profit of between 80 and 95 percent (the figure varies between brokers, underlying assets and options). If you’re wrong, you lose and end up “out of the money”, you lose the amount you invested. Binary options trading is simple, right?
It is difficult to analyze the market and make well-informed decisions with market movements. Binary options trading without analysis is guesswork and leads to unnecessary risks.
We recommend that you start trading with underlying assets that you already know. If you are used to trade shares on the Stockholm Stock Exchange, then you should focus on that. If you have a great relationship with the USD / SEK then you should buy binary options for it. If you followed the price of gold as it evolved over the years, then you should go for it.
The Most Common Binary Options
After selecting the underlying asset you want to focus on, your task is to choose what you think will happen to the price within a predetermined time frame. The cool thing about binary options is that it is as common to bet on declining prices as it is on rising prices. Thus, one can make money on the negative trends.
In Binary options you have (the most common case) 4 choices for your underlying asset: the call, put, touch or boundary.
You also need to choose a time frame for your options and your choices vary between different binary options brokers. Normally, extensions in time rarely last more than a few minutes or hours, though some brokers also offer further investments in a few weeks or months. In the past, it has also become popular with extra short times – down to half seconds and ticks.
In binary options, it is necessary to work out a system that you like. Focus on the options you prefer and find time where you can easily predict what will happen.
Brokers Binary Options
As we mentioned earlier, it is extremely important to use a reliable broker when trading binary options or invest in other financial instruments. Fortunately, we have already examined the market in every detail and tested both good and bad brokers in the process.
If you are unsure of what is required of a reliable Binary options broker or do not want to investigate yourself so you can always use our recommendations.
In general, a good broker ought to be regulated and have a license to run their business but there are many other factors that also affect quality. What tools and resources they offer, how good their customer service is, how their platform, and most importantly, how good you feel comfortable with them. If you use a broker that you do not like, you will not be able to develop as a trader and you will probably get bored pretty quickly losing interest in Binary options.
Here Are A Few Of The Brokers We Prefer To Use For Binary Options:
IQ Option is one of the most innovative brokers on the market. They were launched in 2013 and since then has serviced millions of customers worldwide. IQ Option provides a wide range of underlying assets, a free demo account with $ 10,000 USD and customized apps for both iOS and Android. IQ Option also offers several other forms of investment like Binary options trading.
BDSwiss is a binary options broker that also offers access to the forex market and CFDs. They have a good reputation and is someone you can really trust. They have, among other things, recommendations from Forbes for their brilliant achievements and serious supply assets.
Binary Options On Mobile
Due to the binary option’s intensive nature, there is room for a perfect relationship with mobile devices. Whether you’re standing in line at the grocery store or sitting and waiting for a meeting to start, you can open the phone and make a few quick transactions. It means that you can get a good day’s start by earning a few hundred pieces of binary options before you come to work. Could not believe it?
When it comes to mobile betting, binary options one of the leading markets. The majority of brokers for binary options offer mobile versions of their trading platforms and this is something that we and many others love.
Binary Options Demo Account
If you are still unsure whether binary options is something for you, you can try to open a demo account. Almost all of the binary options brokers that we encountered offer demo accounts in one form or another.
With a demo account, you get access to a broker’s trading platform fixed completely without risk. You can, in other words, trade binary options without risking your own money. A perfect way to test a new broker or get a better understanding of how binary options work.