Sunday, 13 May 2018

Understanding Binary Options

Binary option is a method of trading on the  financial instrument which allows investors to speculate on whether the price of an asset will go up or down within a predefined time. The period than an investor has to make returns from his investment usually lasts from 60 seconds to 1 day or moreThese options pay a fixed amount if they win but the entire investment is lost, if the binary trade loses. This makes the trading of binary options attractive and fun, because an avid investor can make as many trades as possible within some hours, across any chosen instrument.

Another factor that makes binary options trading the ideal financial instrument is that any investor can easily determine his risk before placing a trade. Many brokers will give you the percentage of profit on your investment even before you trade. It usually ranges from 80 – 95% profit on a successful trade. 

This makes risk management and trading decisions much more simple. The outcome is always a Yes or No answer – you either win it all or you lose it all – hence it being a “binary” option. However some brokers allow you to sell back your trade when you find out that you have a bad decision. The risk and reward is known in advance and this structured payoff is one of the attractions.


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