Beginner's Binary Options guide
It can be said that binary options are the new spoiled child among financial investment instruments, which can be seen in the fact that thousands of speculators around the world are entering the operation with this instrument. Trading with binary options gives the possibility to investors with little experience in the financial markets, to invest in a simple way and obtain quite interesting gains, in a short time providing an almost instantaneous gratification. Also, binary options are a good alternatva for operators who do not have a capital of thousands of dollars to start operating.
Being a relatively new instrument on the market, probably for many investors is not common terms related to binary options, so we include a small guide for beginners in a way.
What are binary options?
Binary options are a financial instrument whose operation can only produce two possible results, hence the name of binary or digital as they are also known. The premise of trading with binary options is that the trader tries to predict whether the price of an asset or instrument will go up or down by the end of the expiration period of the contract which in this case is usually 1 hour. If the operator hits its prediction, it gets a fixed percentage of earnings from the amount invested, but if it fails and the price moves against it, it loses the amount invested in the operation, although some brokers allow to retain a percentage of up to 10%.
This relatively new investment instrument has the advantage of providing operators with instant gratification and results. Binary options operations are conducted entirely on a WEB-based platform and environment, so it is possible for the investor to operate from any site that has a computer and Internet connection, similar to the Forex and other financial markets.
Trading Benefits with binary options
Some of the main benefits of trading with binary options include instant results, increased risk control, a fairly straightforward operation, even for beginner traders, the potential for high profits and the ability to conduct operations over the Internet, among others. More information on this topic can be found in the following article:
Trading Dangers with binary options
As with any other financial market, if the operator does not have enough knowledge or mental preparation to operate properly, he may lose a lot of money if he is not properly cared for. Due to the simplicity of binary options, many novice operators use a trading strategy similar to the one they would use in a gambling casino, which can be extremely risky and can easily lead to disaster because they are in no way equal. More information on this topic can be found in the following article:
What is the risk level of binary options?
The risk level of binary options is quite low compared to other markets and depends to a large extent on the operator, although this in my opinion also applies to other investment instruments since the trader must always establish the maximum risk that he is willing to run in his operations. In the case of binary options, the investor always knows how much money is risking an operation because there is no possibility of losing a larger amount to this.
How can I choose the best broker to operate binary options?
As in other financial markets such as Forex, it is vital that the operator selects a broker that is reliable, secure and able to offer the best possible service. Although the binary options broker industry is still in its infancy, there are many options among which the investor can choose. Other aspects that the operator should evaluate in a binary options broker are customer service, the operating platform, the amount and flexibility in assets it offers to operate with options and the browsing characteristics of the company's website. More information on this topic can be found in the following article:
Are binary options complicated?
Quite the opposite, in fact the main advantage of binary options is its simplicity. The operator has only two possibilities, to be "in the money" (correct in its prognosis and the operation was won) or "out the money" (failed in its prognosis and the operation caused losses). In case the trader considers that the price of an asset will go up, it simply invests in a call option, on the contrary if it believes that the quotes will fall invests in a put option. On most binary options trading platforms this can be done by simply pressing a button with an arrow pointing up (call option) or a button with an arrow pointing down (Put option). From there the operator should simply wait for the expiration period of the binary option contract which is usually 1 hour. As you can see, it's a pretty straightforward operation.
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