Trading Binary Options
- Published: Wednesday, 05 November 2014 11:18
- Written by Christian Heise
In the core of tradings with binary options is the development of a underlying market price. A Underlying ca be a stock, a currency (EUR/USD) a indices (Dow Jones) or commodities (Gold). This is indeed not physically gained, but its performance determines upon profit or loss. Depending on the chosen type of trade, the income returns can amount up to 500 percent, whereas naturally, the risks also increase accordingly. The functionality in binary trading, however, can bring all the variants to a common denominator.
Anticipating the performance of several underlying instruments
The origin is always the current market price of a base value, which can also be a share index, a share, a commodity or a currency pair. If the trader expects that this worth will experience a rise in price within the option period, which can take between a minute and several weeks, he starts a call or high option and sets an amount.
Already by the completion of the option, it is certain how high the profit can become inoperative. In the classical variable, the call-put or the high-deep option, the income returns can amount to between 60 and 90 percent usage, depending on particular brokers. By the expiration of the option, the closing rate is compared with the initiation of the established beginning rate up to five digits after the decimal point. With the decision on profit or loss, a derivation is only crucial when on top or at the bottom and not when at the same height.
Varied types of trade and risk categories
Of course, binary trading also functions in the opposite direction, when the trader assumes that the market price will drop in the relevant time span. Furthermore, the risks and hence the increased profit chances, the varied time spans or varied additional functions can be used on the different trading facilities. The binary option trading is still relatively young and is developing itself permanently further.
The critical question is always, however: How safe can a trader predict the future development of a market price? The person who does not want look at trading with binary options as a gambling game and wants to run it seriously, should deal with one of the developments in economy, politics and stock exchanges, as well as the different instruments to minimise risks.
Choosing an online broker cautiously
The binary trade is offered by special online brokers who have already completed a big part of the financial authorities’ regulations. Since the range of providers is always getting wider, it is worth it to initially carry out a research about the advantages and disadvantages of individual brokers who operate independently of stock exchanges. Important criteria are the transaction procedures, the deposit insurance, level of minimum stakes and deposits and the trading offers. The more intensively beginners deal with matter itself and the brokers’ possibilities, the bigger prospect of success with binary options.