Binary Options Trading is a type of online trading where a trader predicts the rise or fall in value of an asset such as a Commodity, Stock, Currency pair or an Index, within a given time frame. This form of trading allows a trader to speculate the market movement and make an investment on it.
Also known as Digital Options Trading, this trading system is different from Forex and has a very plain trading process where either a trader wins the trade or loses it all, the very reason why it is also known as “Cash or Nothing” or “Asset or Nothing”.
Binary Options Trading Procedure
The process is simple, you, the trader, select an asset and predict its outcome by placing an investment on “Call” or “Put“. When a trader selects “CALL” option, he/she is predicting the upward movement of the asset, similarly selecting “PUT” option means the trader is forecasting a downfall in the asset’s value at the end of the trade from its original value at the time of trade. Each trade has a fixed expiry time selected by the trader at the beginning of the trade.
- If the asset moves in your calculated direction, at the end of expiry time, you win and if the asset fails to meet your prediction, then the trade ends with a loss. A third outcome is where the asset doesn’t move from its original position and the trade ends with no result and the trade is cancelled.
- If at the end of the trade the asset moves in the opposite direction of the expected direction it is called “Expiring out of the money” and if the asset moves in the predicted trading path it is called “Expiring in the money” .
A successful trade (when the trade “expires in the money”) will result in a return of 65% to 85% on the investment, depending on the type of trading product selected.
Assets in Binary Options Trading
Underlying asset or the asset on which Binary Options Trading system is based are largely divided in four basic categories –
Binary trading brokers allow traders to foretell the future of stocks of popular companies like Microsoft, Sony, Google, JP Morgan, TATA Steel etc.
Most popular commodities that can be traded online on a Binary Options trading platform are Gold, Silver, Sugar, Wheat, Coffee and many more.
Currency pairs are one of the most popular assetsspecially among traders with expertise in Forex trading. AUD/USD, EUR/USD, GBP/USD, GBP/JPY, USD/CAD and NZD/USD are few of the many currency pairs supported by Binary Options Trading brokers.
Traders can also select from Indices like NASDAQ, Dow Jones, NIFTY and Dubai General and more.
Unlike Forex trading or Stock trading, Binary Options doesn’t need you to purchase or buy these assets. In this digital trading system, you simply invest on the outcome of the asset’s movement. You simply select a Stock, a Currency Pair, a Commodity or an Index and place an investment on its movement which makes Binary Options less risky and easier to trade, even for those new to the financial trading.
How to Trade ?
Choose from over 180 assets for your Binary Options trading
Predict the direction of the asset for the selected trade type
Invest the money for your online Binary Options trading