How Binary Options Work

    July 17, 2015

    You may have heard of Binary Options but no clearly understood what they are. Well, you’re in the right place if you’re curious about this geek-sounding term. We will explain briefly how binary options work.

    How binary options work

    Known also as digital options in some quarters and fixed-return options in others, binary options are financial instruments that easily allow you to bet on the asset of your choice based on how its prices are moving.

    Why they have become a popular trading tool of late is that they offer a low-risk way of betting in financial markets. Thanks to their fixed-odds returns, binary option traders suffer minimal How Binary Options Worklosses even if a trade doesn’t go their way. If you’re looking to begin trading, BO are therefore a safe place to start.There are different options available to you if you want to get start in binary options. Binary option brokers will give you the following alternatives when you approach them:

    One touch- Whenever the asset you’ve chosen to trade in achieves a certain price, you receive a payout. Any time the pre-determined price is hit during the trading period, you get the percentage due you.

    Sign up FREE here to train and trade

    High-Low-This option, also known as Call/Put, is the most popular of the binary options. Here a certain price is set and a time period given. If at the end of the period, say one hour, the price is anywhere above the price and you had bet “Call”, you win.

    Tunnel or Range- Here, instead of having one price level, the trader specifies a high and low boundary for their trade. If the price of the assets they had bet on remain in between the boundaries (without touching the high and low points) for the entire trading period, the trader gets a payout.Binary Options Trading

    Target- As the name suggests, this option deals with a specific target price rather than a range. You have to set a particular price and when the asset hits that price, you get a payout.

    Payouts from digital options are given as a pre-stated percentage which is ordinarily between 70 and 85%. This is how your returns will be calculated if you place a winning bet, so to speak.

    Sign up FREE here to train and trade

    * Watch this video about binary options basics

    All info was correct at time of publishing