Monday, 5 February 2018

Financial instruments




Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership interest in an entity (share), or a contractual right to receive or deliver cash (bond).
Binary options trading is majorly interested in Currencies of major world economies like USA, Great Britain, Japan, Canada, etc.

You will notice that every currency is contantly being exchanged with one another at various rates. These rates makes the currency either go up or down (binary) within some specific time. The period of going up or down happens every second in as much as people and nations and cooporations are exchanginging their currencies for business purposes. For example you will see Eur/Usd quoted at 1.3985. This mean that 1Euro is equivalent to 1.3985 Usd. Eur( means Euro) and Usd(means United States Dollars). Another example is Usd/Naira quoted at 360. This means that 1 USD is equivalent to 360 naira.

Now the value can rise or fall in the next 30 seconds and in the next 5 minutes or 1 hour or 12 hours or 24 hours. Your responsibility is to chose if it will fall after 1 minute or after 5 minutes. The period of time you chose depends totally on you.

If you speculate that Eur/Usd will move from 1.3985 to anything above 1.3985 in the next 5 minutes you will click on call ( Call means that you are saying it will go up) Put means you are saying it will go down. At the end of 5 minutes if the price is 1.3986 you will get some profit. That is how easy it is to make money with binary options.

There are over 30 Financial instruments you can choose from. this is can make you get confused in the beginning but I would suggest you keep to only the major currencies like Gbp/Jpy, Euro/Usd, Usd/Cad, Gbp/Usd. I personally trade only Eur/Usd for over 3 years. The choice is yours.

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