Basics Of Binary Options Trading

If you are always browsing on the web, then you may have already came across a couple of online banners about Binary option Trading. Well, if you are a trader and you do not know anything about this new trading system, it will surely get your attention. How can you possibly reject something like gaining 71% in less than an hour and getting back 15% if the options expire out of money? For anyone who wants to earn money through trading, it is one of the best and the most profitable system available today. You can make thousands of dollars for only a short span of time if you know how it works.

A simple example of options trading shows how easy it is to trading binary options signals. Say you have in mind that gold prices will raise by the end of the day. You are going to buy a gold call option with a reward of 75% and 10% refund of your agent within the end of the day. If the closing price of gold is greater than the purchase price on the option that will benefit 75% in less than one day.

The traders have also an important feature available to them. You can cancel the trade when you see that you may lose so that you can minimize the losses. When you run out of the money, you will also use the Rollover option so that you can extend the time that the options should have expired. This means that a losing options may turn into your favor and you can increase the time needed to reach to your target price. However, you will have to pay for a commission between 10 to 35 percent as a fee for this method. The percent is on the initial investment.

If you wish to be successful in this, you must have a clear grasp of the option’s conditions. Terms in this trade are different from those used in a regular finance trading system. For example, call options are the ones that pay out if the price strikes above the desired level on an established date. A put option on the other hand is when it fails to reach the strike price.

The second benefit is that the payout on a binary option is fixed. This means you know what you will be getting and thus they are slightly less risky than the traditional form of day trading.

The main reason why binary options are so successful nowadays it’s the fact that it is the simplest way of trading, and people like simple things. You don’t have to be an expert trader in order to understand how digital options work. The only thing you need to know to be successful in trading binary options is the direction where the market will move. No more problems with placing the orders, calculating risks and rewards, margin calls, stop losses and other complicated parameters.

Apple share prices are currently selling at 334.20. You could try to buy a number of stocks, but binary trading is quicker and easier. By looking around you will see that these shares have dropped over the past few hours, but you think that in an hour the stocks will rise. You buy three binary trading contracts for $5 at 45, so that’s $675 (three stocks at $5 at 45) at 12pm. Sounds like a lot of money, but at 1pm the Apple share prices are at 334.60. That’s a rise, so your ‘bet’ has paid off. Three options at $5, with a difference of 55 means you get $825, a profit of $150. I don’t know of any job that pays $150 an hour.

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