What is a Binary Option? Here’s the Answer
May 14, 2015
1 What is a Binary Option?
A binary option is an attempt to predict how the value of a given asset will change over a period of time. To understand BO trading, first understand how trading in other markets normally works before you tackle the question: what is a binary option.
For most investments, the person or institution making an investment aquires ownership of an asset at a price that is usually agreed at the time the deal is done. When an investor sells at a time the price has increased, they’ve made a profit and if they sell when the price has decreased, they’ve made a loss.
This type of trade requires the investor to continually watch the market to determine the exact moment that sell their assets. BO trading is much simpler because BO traders bet on the market, not in the market so the amount of stress and effort is reduced as you spend your time making predictions about the market, not watching what the market does.
2 Binary Options Defined
Binary means “to have two separate parts. In general a binary option needs to determine a “call”or “put”option so you only ever need to worry about two scenarios and then make a choice from either. If you believe the value of an investment is going to rise, you place a “Call” option. Where you think the value is going to fall in the market then you express a “Put” option.
Carefully choosing an asset is the first step. Placing a binary option in markets where you are more familiar will help you make more accurate and profitable choices between “Call” or “Put” trades.
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3 What Type of Assets Can Be Traded as Binary Options?
Traders can take binary options positions in a variety of assets that are avaiablethrough a number of sources. One, Opteck has a number of binary contracts that traders can take advantage of.
Binary Options Traders can trade in:
- Stock market indices such as Nasdaq, FTSE 100, Nikkei, Dow Jones and many more
- Forex values in all the major currencies including US Dollar, British Pound, Euro, Australian Dollar and the Japanese Yen
- Commodities traded widely across the world such as oil, gold, silver corn and coffee
- Stock values of more than 50 of the world’s largest trading companies including Coca Cola, Deutsche Bank and Google
4 Where Can I Learn to Trade Safely?
Novice and experience traders alike can all benefit from training at the Opteck Academy. The academy provides both types of traders with valuable resources for learning new techniques and improving those you are already familiar with. As a registered Opteck trader you have high quality training resources available at the click of a mouse button. Smart traders are well informed and will always do better than those who rely solely on instinct trades or just good luck.
5 How Does Opteck Trading Work?
The first decision is to choose an asset to trade in. try, wherever possible to trade where you have prior knowledge. If you decide your asset, say gold, is going to increase in value you then decide how much to invest, how far in advance you think they value increase will be and what trading instruments you wish to use.With this simple process you could make as much as 100 percent profit. You can start trading now by opening an account or you can take a no risk demo here using the Opteck Binary Option demo platform.
Read our Opteck Review here.
See our comparative table of the Top 10 Binary Options Platforms for South Africa here
All info was correct at time of publishing