Binary Options

While there are many ways to invest your money, there is one way to invest it and has proven itself to budding investors; the binary options trade. This is one way that investors can make a lot of money or loss a great deal of it. It is a thrilling all or nothing game. It is very simple and does not involve strenuous calculations of values and variables. Reading this article will enlighten you on the WHAT, HOW and WHY the binary options trade and may be the first step to unlocking your financial potential.

There is the traditional trading in which profit or losses are a matter of chance, and there is the binary options in which you anticipate a certain gain or loss from an investment. One may think that the outcomes of these two investment options are the same. They are not! With binary options, the investor anticipates a known percentage of gain or loss (not more, not less). For instance, say you decide to invest $100 on an asset X whose strike price is $50.0 at the time of investment, and you anticipate a return of 50% on it during the expiration date T. This means that if you had predicted the asset price to have appreciated by the time it reaches expiration, you gain $50 if you predicted right or loss $50 if you predicted wrong.

There are two kinds of options in Binary options- the call options and the put options.

1. The call option
With call option, you earn when the value of the asset you put your money on is GREATER than its value at the time of investment.

Using the above scenario, if you predicted that at expiration time T the value of the asset will be higher than $50 (value of the asset at the time you invested), and it turns out that the value at time T becomes $51.2 or even $60.0, then you have won the bet. You earn 50% of your investment. If at time T the value of the asset becomes $49.9 or less, then you are a loser. You loss 50% of your investment ($50)

2. The put option
The put option is the opposite of the call option in that you predict on the depreciation of the value of the asset at the time of expiration. When the value of the asset you have put your money on is lower than its strike price (value of the asset at the time of investment), then you gain.

Using the above illustration, if you predicted that by expiration time T the value of the asset would be lower than its strike price and it turns out that the value of the asset at time T becomes $49.9 or less, then you have won the bet. You earn $50.
If at time T the value of the asset becomes $50.1 or more, then you have lost. You loss 50% of your investment.

Binary option trade is just but a game of losers and winner. You just have to bet your money on the right outcome, and seeing that there are only two possibilities available, on has to have the right knowledge to make it work in this trade.

HOW BINARY OPTIONS WORK

Trading in the binary options is easy. Here are three steps to show just how easy it can be:

1. Choose the right asset
There are not many assets to choose when trading in binary options. You can choose to trade in two or more assets or just specialize in one niche. One can choose of either currency pairs, commodities, stocks, or indices.

2. Make the right prediction
There are only two outcomes of any given prediction. Gaining on a prediction involves knowing exactly when the trade expires. This may range between now and a month. One has to make the prediction and let it mature.

3. Invest and trade.
Once you have identified an asset to invest in and anticipate an outcome, all that is left is to bet your money on it. This is investing.

Binary options is an exotic options trade that is unique in its own way. There are vast technological advancements in this trade that may come in handy to the investor. There are also different kinds of binary options to choose.

1. Digital trading
Digital trading involves prediction whether the value of a certain asset will have risen or fallen at the time of expiration.

Optionbit is a feature found in digital trading that gives the trader special control over the outcome. It offers unique possibilities such close and extend options.

a. Close now
It enables the trader to cancel the bet before the expiration time. This allows the investor to remain with some profits he may have gained.

b. Roll over
This feature enables the trader to extend the expiration time at a onetime fee.

2. Range trading
Range trading does not have the Optionbit feature. In range trading one predicts whether the value of a given asset will be in or out of a given value range at the time of expiration.

3. Touch trading
Like range trading, it does not have the Optionbit feature. It involves predicting that the value of the asset will touch a certain value at expiration.

Reading the signals right is all it takes to make it in the binary options trade. Before you invest in anything it is always advisable to do thorough research on the asset trends or the organization you want to invest in. the difference between winning and losing is a thin just a thin line. You can increase your chances of winning by frequenting binary options forums and reading a lot on it. Be wise; do not throw your money away.