What is Binary Options trading?

What is Binary Options trading?
Binary Options are one of the new and simple financial trading products made available to traders. Binary Options are a form of an option that provides a fixed deadline for expiration with a fixed payout. Binary Options trading only has two outcomes for any trade PROFIT or LOSS. If you are successful in a trade you get up to 91% * return on your investment, else 100 % of the invested amount is lost.

* Amount to be credited to account for a successful trade.

How to trade:
1. Choose your asset
2. Make a prediction
3. Select investment amount
4. Trade (by clicking CALL or PUT)

Example:

  •  If EUR/USD is trading at 1.12052 and you predict the currency pair will be lower in the next 5 minutes and you want to invest $25?
  • Find EUR/USD in the broker’s asset list, select the time period of 5 minutes, enter $25 as your investment amount, click on the PUT (SELL) button and the trade is executed. The return on this trade is 85%.
    You’ve now predicted that the currency pair EUR/USD will be lower than the current level of 1.12052 in 5 minutes time.
  • After 5 minutes EUR/USD is trading at 1.12012, lower than the price 5 minutes earlier, when you entered the trade. Your trade gets closed automatically by the broker after the expiry of 5 minutes.
  • Since EUR/USD was trading lower as you predicted your trade is closed for a profit (known as in the money). The profit for a $25 investment with a return of 85% is $21.25 ($25 x 87% = $21.25) which is credited to your broker account almost instantly.
  • If your investment amount had have been $100 you would have made a profit of $85 on just this single trade.
  • There are different expiry times starting from 30 seconds to up to 5 minutes in Turbo Trading option.
  • And expiry of every 10,15 minutes, 1 hour and 1 day, end of the day also available with many binary option brokers.

Binary options trading easy or complicated:

  •  Binary trading is quick, simple and very profitable, but at the same time risky. You may lose the invested amount completely. You would have lost $25 in the above-shown example trade if you were wrong in your prediction. If EUR/USD would have closed above 1.12052, you would have lost the trade and your invested amount $25.
  • Hence it is very important to manage the risk in binary options trading, in order to be a successful trader.