Binary options trading is a very exciting potentially high risk, a form of reward trading. One of the attractions of binary options trading is that in the time it takes most contract options to expire, usually one hour, you can achieve a significant return on investment. Exciting for some, but for others it can be too risky given the different personality types of investors. Whether you are conservative or risky, binary options trading can be exciting and lucrative.
Before you understand how to trade binary options, you must first understand what exactly a binary option is and how it works. Simply put, a binary option is when a trader buys a fixed asset contract and tries to predict whether the value of the asset will increase or decrease over the life of the contract. If the value of the property increases at the end of the contract, you will be considered monetary, and if the value decreases at the end of the contract, you will be considered monetary. And just to note, I’m sure the phrase in money is much more appealing and quite understandable to you.
Here’s an example of how this can work. Let’s say for the sake of this example that you are an online merchant. You would go to one of the many binary options broker sites and choose the asset you are interested in. You would then find a contract for that particular asset, buy either a call contract if you believe it will end higher or a sale contract if you believe it will end lower. Most binary options have an initial start length of one hour. You can buy option contracts mostly up to 5-15 minutes before they expire, but most start from one hour. Within an hour, your asset will most likely oscillate up and down in value (price), but that has nothing to do with whether you end up in the money or run out of money. Only the actual value of the property at the end of the Contract is important.
When the contract matures or expires if you have chosen the correct option, you will be considered money. Most return on investment (return on investment) for binary options ranges between 150% and 185% of your initial investment. Here is an example for you. Let’s say you bought a $ 500 call contract for a new company that is currently being sold at a price of $ 85 per share with a one-hour maturity and a payout of 160%. If at the expiration of that contract this new hot company was at the level of 86 dollars, you would be in the money and you would get a return of 800 dollars. That’s a $ 300 return on your investment within an hour. Can you see how this can excite your everyday trader? Obviously there is a risk to any investment and you could just as easily end up making money without a return on investment and most of your initial investment would be lost. You need to conduct research to make educated investment decisions.
In any case on binary options trading it is a very exciting form of trading. Whether you are a part-time recreation trader or a regular investor, options trading can be very lucrative at any level of experience.