Binary Options are becoming more and more popular, due to the fact that most brokers are now regulated. Binary Options are a simple way to make money online and is in many ways similar to online poker.
You don’t have to be a stock market analyst or any financial expert to get into binary options.
What are binary options?
There are many ways to trade currencies online. One of these is through binary options. Binary options are a type of exotic trading instrument that is offered by exchanges around the world.
The trading is done on the internet through a dedicated website portal called broker. There are many sites that compare the best binary options brokers, like the one maintained by Matteka Anderson. This way you can read real reviews before depositing your money.
A binary option is a speculative trading instrument. It is presented in a simple yes or no question by a broker online. For example, a binary option can be presented as “Will the price of gold be above $1, 500 at 2.00pm?” this is an option that you can buy or sell.
As such, it has a bid price which is its selling price and an ask price which is its buying price. Binary options are good trading instruments where you can win or lose depending on the market conditions.
Characteristics of binary options
Binary options are great because they are simple to trade. These options are similar to online poker. You can deposit money and win or lose it. For example depositing and withdrawing works the same way, many companies that are active in the online poker industry also joined the binary options industry. Especially for online poker players, who are familiar with odds and probability, it is very easy to get into binary options.
Moreover, the binary options trading market is a zero sum game. This means that when you are winning, there is someone else losing by exactly the same margin.
However, if you buy the option at the ask price of $44.50, you risk this exact amount if the option expires at $0. Therefore, chances at the option even out for both traders. Binary options take many forms. They can be questions about stock markets, oil price fluctuations, prices of trading commodities and more. Each option is also known as a contract. You can buy more than one of these contracts if you really believe in your trading position. Of course, there is more risk in doing this but there is also more reward.
Advantages of trading binary options
One of the biggest advantages of trading binary options is that you can trade many different types of investment assets across various industries and markets at the same time. Most binary options brokers are now regulated by CySec.
As such, for a smart trader, the returns can be huge in a short period of time. Another benefit of trading binary options is that you have a chance to invest a low amount of money in the options. As such, you can risk only as much as you can afford. As long as you have a capital base of $100, you can get in on any option or contract in the market.
Each and every option gives you information about the amount you can win or lose prior to your investing in the option. This information is presented in the option’s bid and ask prices. Therefore, you can make an informed decision before investing in an option. Most other financial trading instruments do not have this option. With binary options it is possible to know when your trade will expire.
This is because each option has an expiry time period. Some of the options expire in 15 minutes and others in a week. Thus, you can get your money in a short time as opposed to other financial trading instruments that take months for you to get your returns. Binary options are an awesome way to invest money over the internet.
If you are still unsure, you can always try a demo account, where you don’t have to invest real money. This way you can see if this is something you want to invest in or not.