Binary options — what are they?
In Russia and the CIS countries, the popularity of digital trading is gradually growing: more and more people are becoming interested in this type of earning. Against the background of the widespread popularity of the Forex market, more accessible and understandable financial instruments remain in the shadows. For example, few people know what binary options are, yet such trading can bring investors up to 85% profit.
What are binary options?
Binary options are also called digital options or “all-or-nothing” options. Depending on whether the specified condition is met, they can bring fixed profit or nothing at all. The condition is an increase or decrease in the market value of an asset, such as currency, oil, gas, or company shares. At the same time, the investor (player) does not purchase the asset, but only predicts the possible outcome.
How do binary options differ from other types of trading?
Binary options have several positive differences from other types of digital trading:
1) Controlled risk.
The investor knows in advance how much he can lose and how much he can gain. The payout percentage is stated in the option description. As a rule, it ranges from 60% to 85%.
2) Minimal risk.
In case of a loss, most exchanges are ready to refund up to 15% of the bet amount. With a properly chosen strategy, even such a small compensation can allow you to recover losses or even make a profit.
3) Accessibility.
Since the investor does not buy the asset, the number of people who can purchase the same option increases. This is precisely why option prices are so affordable and payout percentages so high in case of success.
4) Speed.
You do not have to wait long for the outcome of a trade. A binary option can last until the end of an hour, a day, a week, and more rarely a month. After this period, the investment result becomes known.
5) High returns.
This is what scares many people who want to start earning with binary options. With such high percentages, it naturally feels like something is wrong. Returns of up to 85% per trade are real and well justified. As mentioned earlier, the specifics of binary options allow exchanges to increase the number of players without affecting asset prices. Binary options are available to everyone, and the growth in active users allows platforms to offer such high payouts.
6) Simplicity.
Even a child can understand what binary options are, and to establish yourself in this market and earn real profit, you do not need to be a financial analyst. To make a profitable investment, it is enough to predict the direction of an asset’s price movement without specifying the exact size of the rise or fall. For example, in the news you see that a large corporation is acquiring a controlling stake in a young but promising company. You do not need deep financial knowledge to understand that this corporation’s shares will rise soon. Why not take advantage of this and earn money on binary options?
Is it really possible to earn money with binary options?
On the internet, you can find many stories about people who found a new field and immersed themselves in it, leaving their previous lives behind. In most cases, such drastic changes are caused by wins on bets or trading on exchanges. There are also many such stories related to binary options, but people are less willing to share them. Why reveal such a simple way of earning?
Let us find out whether it is really that simple. Like any other financial activity, especially online, trading binary options involves certain risks. It is not for nothing that this type of option is called “all or nothing.” Even with careful market analysis, force majeure situations may occur. Be prepared for some losses, especially at the beginning, and avoid reckless decisions.
Binary options are not a lottery. Luck plays one of the smallest roles here. To make a winning investment, you need to follow the latest industry news. For example, several weeks before a currency decline, analysts begin warning the public. Once you start trading on such platforms, you will learn to understand and use these warnings.
To sum up: with the right approach, proper analysis, and understanding of possible risks, you can earn good income with minimal investment.
How to trade binary options?
To start trading, you need to take three simple steps:
1) Register on a broker’s website.
2) Choose an asset.
3) Choose the direction of price movement and the option’s expiration time.
That is all. All that remains is to wait until the option expires and see whether the investment brought profit or was completely lost.
Before you start trading, it is worth learning more about such terms as “call option” and “put option.” A call option is a bet on a price increase, and a put option is a bet on a decrease. This terminology is used worldwide to simplify trading and make it accessible to every player on any exchange, regardless of location. This approach allows more advanced and developing binary options markets to grow in any direction.