Basics Of Binary Option Trading

Binary option trading is a revolutionary form of online trading, which comes with limited risks. You can trade on varying assets with zero commission. These radical features are breaking the barricades and creating opportunities for the investors.

What is the meaning of binary options?

Binary options means, you can get choose between 2 alternatives. These are given to an investor in the form of ‘CALL’ and ‘PUT’. The trader has to predict the rise and fall movement of an underlying asset’s current price, within a specified timeframe.

Remember, there is no obligation to purchase the asset. Moreover, the range of your prediction be it small or big, does not matter. If your prediction is right, then the predetermined payout percentage will be yours.

Understand the two options:

1. ‘CALL’ – If you feel the current price of an underlying asset will increase within a specific timeframe, then click the ‘CALL’ option
2. ‘PUT’ – If you believe the existing price of the chosen underlying asset is sure to fall within a definite time period, then click on ‘PUT’ option.

Expiry timeframes to select:

Traders also get to use the leverage, but there will be a limit to the earnings or losses. Various closing or expiry times for options are provided. Traders can select 1 hour, 30 minutes, 15 minutes, bi-weekly, weekly, intraday, or even monthly.

Three steps to place a trade

1. Determine the asset to invest
2. Predict if this asset price will rise or fall
3. Decide if it will occur now or later

In a few minutes, after you decide the amount to invest, the deal is conducted. The best part here is you are aware how much profit and risk is involved.

After you understand the binary option trading, there is no need to sit for hours in front of news channel or read Wall Street Journal. However, it is important for you to be updated with the world economic headlines. Knowledge of market status guides you to minimize the risks, and make more investments in the appropriate directions.

Binary option trading platforms

With online trading platforms, the need for a middleman has been averted altogether. If you choose the right brokers, you get unlimited transactions, continuous education, and excellent customer service. KeyOption education center is one of the best online resources, where you can learn a lot about making the right trading decisions.

Advantage of binary options trading

Besides the simplicity and potentials to earn big, binary option trading is also an enjoyable type of trading opportunity.

Simplicity

In every situation, it is either profit or loss, which is based only on the asset movement. There is no need to pay attention to details. All you need to know is the price movement of the underlying asset, before the expiration time.

Entering is easy

Entering a trade is simple, because the investor is buying the contract for a set price. They will be fully aware of how much will be gained or lost. This in-built risk-management feature that allows traders to place their trades without worrying too much.

Low capital investment

Novice investors can start trading with small amounts. Once you become familiar with binary option strategies and gain good experience, you can obviously invest more, to rake in bigger returns.

Short term investment

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Many traders find long-term payouts to be stressful to handle. You will take many years to master most of the traditional trading opportunities, but binary options are short-term and flexible. Investors get total control here, as they can trade with closing time ranging from 15 minutes to 1 month. This flexible feature enables investors to earn well in minutes.