So What Are Binary Options and How Do You Trade Them?

Hi there, its been a while. And today I thought I would just share one of the new ways I found, to earn you a few bucks so that you can pay for those dates! Ok here we go.

Here’s a basic idea on what binary options trading is and how you can can start trading them.

Video on  Trading a Binary Options

A correct prediction means that the option is in-the-money, or out-of-the money, if an investor chose the wrong proposition and may lose all his money deposited to the trading platform with no refund. These  binary options are also called digital options (common in the Forex/ interest rates markets), all-or-nothing options or Fixed Return Options (FRO’s).

Advantages of Trading Binary Options

  1. The risk and reward in trading these options if known beforehand, at the time the contract is acquired hence a controlled risk to reward ratio.
  2. They only require a sense of direction and magnitude of the price movement of the asset and also, fundamental and technical analysis strategies are increase the accuracy of the price movement prediction.
  3. No actual assets are ever bought or sold.
  4. They offer contracts with short term durations which can be as short as 30 seconds.
  5. The right prediction rewards the investor his winnings regardless of the amount of percentage that his prediction was in-the- money unlike traditional options.

Warnings to look out for when Trading Binary Options

  1. Like in all forms of trading, understand the pros and cons especially the financial risks associated with this type of trading.
  2. Avoid taking bonuses since the broker can lock your money until you make a certain percentage of profit on your invested amount.

There are both risks and rewards that an investor needs to understand and evaluate in all kinds of trading and as so, exercise prudence in binary options trading.

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