What is Binary Options trading?

Also referred to as Digital Options, Binary Options became available as a method of investing in the financial markets in 2008. It is a simple way that anyone can make money off different financial markets. The mechanics of binary options trading are accessible to both novice and expert Forex traders. Today, binary options have become very popular, with many people transitioning across from Forex in a bid to derive profits from this unique and highly profitable trading vehicle.

Trading binary options simply involves making a prediction on the likely direction of movement of an underlying asset. This could be a currency, index, commodity or stock. The trader also has to choose a designated expiration time. When trading Binary Options, the trader does not have to purchase the asset in itself. All that is required is for you to make a prediction regarding the direction the asset will take over a certain period of time. With binary options, there can only be two potential outcomes… the only thing that matters is whether the prediction you have made is right or wrong for the time frame you have chosen.

How to trade Binary Options on

  • Pick the asset you wish to trade
  • Select “Call” if you think the price of the asset will go above your entry price at the time of expiry.
  • Select “Put” if you believe the price will fall below the entry price at the time of expiry.
  • Sit back and wait for the outcome of the trade.
  • Collect your profits if the trade ends in-the-money.
  • Move on to the next trade if it ends out-of-the-money.

What are the advantages of Trading Binary Options?

  • Binary options offer a simple way of trading the financial markets. All you need to do is to assess the likely direction of an asset’s price over a certain period of time.
  • You do not have to worry about hidden spreads, commissions or fees, as your risk and reward is clearly displayed on the platform.
  • Binary Options contracts can be purchased at any time of the day. This means that there is always an open market through which you can derive profits.
  • You can easily customize your binary options trading, because the assets expiry time, and investment amount are decisions left to you.
  • The market doesn’t have to make large moves for you to actualize decent profits. Even a single point in your favor is enough for a trade to end in-the-money and make you money.