The Basics of Trading in Binary Options


If you like to take some financial risks, like gambling, then binary options trading may be just right for you. Of course, the odds are far more in your favor than what they are in a Vegas casino. However, according to expert Mr. Jean-Yves Sireau, the win or lose element of binary options and their fast pace make it feel like gambling.

What Are Binary Options?

Binary options cover a number of different assets, and you have to choose one that you want. The contract you purchase on this option lasts anything from several minutes to 24 hours. You don’t actually but the asset itself, however. Rather, you gamble on whether the asset will go up or down. If you predict it right, you will receive the amount as stipulated in your contract. If you predict wrong, you will lose between 85% and 100% of your original investment.

There are only two options available to choose from: high or low (in the money or out of the money). If you choose in the money, you believe that your asset will be worth more than what you bought it for, and vice versa. In terms of your earnings, you will either have the cash or nothing binary, which means you lose 100% if you’re wrong, but gain between 150% and 185% if you’re right. The asset or nothing option means that you simply receive whatever the asset is worth at the end of the contract.

Binary Trading Risks

The greatest risk of binary options trading is making the wrong call and losing your entire investment. Even if you choose asset or nothing, you will generally still lose around 95% of your investment. Hence, you have to be realistic about this and you must be in a position where you can afford to lose. You can choose to resell your asset before the contract expires, which means you have a bigger chance of seeing at least some profit, however. The other risk is that binary options trading can be somewhat addictive, just like gambling.

How to Find a Broker

Through a quick online search, you should be able to find numerous brokers, including Do take your time to research the different terms and conditions offered by those brokers, and see if you can find any reviews. Check the policies and the fees that are implemented, particularly on your earnings. There are brokers that don’t pay cash, offering discounts on future purchases instead.

Do also look into the different tools that are offered through their website. Some, for instance, will also offer other forms of trading. These tend to be the more expensive ones, however. Most of all, you need to make sure that the information provided through the broker is accurate and up to date. And, once you have chosen your broker, you should still not take that information as gospel, but do your own research in market movements instead. After all, this is real money you’re dealing with.