Binary investments in the exchange market are a relatively new phenomenon. And, like any new phenomenon, they evoke both distrust and sincere interest among the general public. But you should be careful and carefully study the market before rushing to satisfy curiosity.

What are binary options, and how do they work? First of all, it is necessary to clarify that this type of investment is one of the varieties of an exchange contract, which is used to make earnings on the price movements of assets, currencies, stocks, goods in the world financial markets.

Income depends not so much on the value of the financial asset but on the correct forecast made by the market participant. For the contract to be profitable, you need to define the direction of the price movement of the selected asset until the completion of the transaction. That is, you choose a period after which the cost of the selected investment will be higher or lower than the actual one. If you make the correct forecast, you earn about 85%; the rate depends on the broker and the investments made; otherwise, you lose all attachments in the option. Thus, the instrument is very convenient for hedging risks when using other types of trading in financial markets.

Binary options trading basics

After you have studied how binary trading works, you can proceed to the actual investing. First of all, because you do not need to be in the market for so much time, everything that depends on the trader is decided at the moment when the option is purchased. At the time of purchase, the type of product, the conditions for winning, the amount of revenue are selected.

Here are some concepts to help you with binary options trading:

  • The expiration time of an attachment is the moment when the accuracy of your forecast is checked, and, depending on this, it is decided whether you win or not.
  • Type of product. If you predict that the value will be higher than the actual one, then choose Call. If lower, then Put.
  • Binary options how does it work? There are more complex investments; a win will be received only if the price touches a certain point. 
  • The amount of profit is directly proportional to the risk. The further to the point to which the price should reach, the greater the risk and the greater the gain in case of luck. Also, the revenue relies on the cost of the product. By purchasing for $10, you may get earnings of $7-8. And if the attachments cost $ 100, then the income may be up to $ 80 and even more.

Features

If you work with Call and Put, all you need to do is predict the rise or fall of the price. You do not need:

  • decide when to close a trade, just like when working the stock exchange in the usual way. The deal will close itself at the time of expiration.
  • Determine the size of the income. 
  • Be afraid of losses. If you purchased the product, you would not receive any losses. At the time of purchase, the value is debited from your account as if you had bought any other product. And no other money will be debited from your account. While on the exchange, you may lose everything if you did not place orders and the price did not go where it was planned.

Advantages

Working with investment, you can:

  • get big profits. Why do binary options allow you to earn more? They make it possible to get almost double earnings from each transaction, on average 80%. It is rarely possible when playing, for example, in Forex. 
  • Do not depend on the amplitude of cost fluctuations. Traders on the exchanges feed on price points; the movement of quotes by at least fifty points is a prerequisite to earn at least something. And the investor makes his profit even if the cost has changed by only one point.
  • It is easy to calculate your earnings by comparing them with the number of purchased products.
  • Receive income even for short periods, for example, five and ten minutes. And even in 60 seconds, if you buy an option with an expiration time of 1 minute, you can make a revenue, and its size is not limited.
  • Conduct trade in any convenient place, including from a mobile phone.

If you choose a reputable broker for yourself, you can trade them, making good earnings, and in much more comfortable conditions than with other variants on the exchange. But most importantly, you must remember to keep learning, even if you think you know everything about binary options.