Binary Options How It Works – A Complete Guide
If you can understand the basics of binary options trading and its rules, you will be able to achieve better results when trading online!
In general, binary options investors don’t need to devote all of their precious time to keep track of stop-loss/take-proflt strategies, spreads, leverage, hidden fees and interest rate differentials, like forex traders do. With binary options you as a trader, you have the possibility to strictly focus on making correct decisions and, as a consequence of this, enjoying your newly made money.
eXbino traders can make money despite of markets volatility. Moreover, in many cases they are able to use it to their advantage. These are the reasons why binary options become so popular these days.
Binary options, which are also known as digital/fixed return options, are investments that allow investors to trade on the price fluctuations of underlying assets with pre-determined returns. Binary options can be opened on virtually any financial product.
Binary options are traded using a trading platform that offers a wide range of trading tools as well as features. The most important thing on which options trading is based are underlying assets. These are the financial instruments which are traded in the options market and include currency pairs, stocks, indexes and commodities. The price movement of the asset at the agreed date and strike price determines whether the trader wins the trade or losses the trade.
When opening a binary option on any asset, the potential profit is known before the investment is made. The investor opens their option at a flxed strike price and decides whether they think the price will increase (CALL option) or decrease (PUT option) in a given amount of time.
When the option expires and your asset has moved in the direction you anticipated, then the trade is In-the-Money and a predetermined return is earned. lf not, then the trade is thought to be Out-of-the-Money, and the trader loses the initial stake.
Prospective traders should always keep in mind that in binary options trading they can afford a strict level of control over their portfolios, meaning they are allowed to minimize and set their own levels of risk. Managing their risk exposure automatically means higher levels of success compared to more traditional assets trading.