What is Binary Options Trading

What is Binary Option:

Binary Options are one of the new and simple derivative product based on Forex, Index or Stocks, that are available to traders. Binary Options are a form of an option that provides a fixed deadline for expiration with a fixed payout. It has only has two outcomes for any trade, WIN or LOSS. If you win you get upto 95% return on your investment, but if lose , 100 % of invested amount is lost.

The benefits of Binary Options Trading are

1. Simple to understand. Traders need to predict asset price direction UP or DOWN at trade expiry.
2. Fast trading with instant return on investment. Typically the trades last for 30 seconds as lowest and up to 1 month . Most popular contract expiry are 1 minute, 5 minute , 15 minute, 30 minute and 1 hour.
3. Can start trading by just investing as low as $10 with regulated brokers and has potential to grow the account balance significantly. But a decent amount to start with is $500 , which can grow significantly if traded properly.
4. No need to invest huge amount to become a trader.
5. Any one with small to medium amount which can be put on risk , can start trading Binary Options right away.

Binomo offers new traders FREE OPTIONS worth $150 , Start trading now with Binomo.

How to trade Binary Options :

1. Choose your asset.

2. Make a prediction ( The asset price will go UP or DOWN.)

3. Select investment amount.

4. Trade (by clicking CALL or PUT).

Example:

If EUR/USD is trading at 1.12002 and you predict the currency pair will be lower in the next 5 minutes and you want to invest $25?

Find EUR/USD in the brokers asset list, select the time period of 5 minutes, enter $25 as your investment amount, click on the PUT (SELL) button and the trade is executed. The return on this trade is 85%.

You’ve now predicted that the currency pair EUR/USD will be lower than the current level of 1.12002 in 5 minutes time.

After 5 minutes EUR/USD is trading at 1.11998, lower than the price 5 minutes earlier, when you entered the trade. Your trade gets closed automatically by the broker after expiry of 5 minutes.

Since EUR/USD was trading lower as you predicted your trade is closed for a profit (known as in the money). The profit for a $25 investment with a return of 85% is $21.25 ($25 x 87% = $21.25) which is credited to your broker account almost instantly.

If your investment amount had have been $100 you would have made a profit of $85 on just this single trade.

There are different expiry times starting from 30 seconds to upto 5 minutes in Turbo Trading option.

And expiry of every 10,15 minutes, 1 hour and 1 day , end of day also available with many binary option brokers.

Binary options trading easy or complicated:

Binary trading is quick , simple and very profitable , but at the same time risky. You may lose the invested amount completely. You would have lost $25 in the above shown example trade, if you were wrong in your prediction. If EUR/USD would have closed above 1.12002, you would have lost the trade and your invested amount $25.

Hence it is very important to manage the risk in binary option trading , in order to be a successful trader.