• Binary Options – What is it about?

    What are Binary Options? Is it the same as Forex or stocks?

    Binary Options are based on a simple decision making: Call or Put, Up or Down, Yes or No. Will the price of the selected asset goes up in let’s say 5 mins? or down?

    Binary Options

    trader drawing lines to make a decision

    Simplicity in Binary Options – What are they selling you.

    Binary Options were made to be simple in the market. Why? Ask your typical friends or your co-worker. What is leverage? CFD’s or Stock? Buy count? Lot sizes? Standard account? Stop loss or take profit? This is just too tedious for the mass audience.

    Go ahead and tell your friends or an acquaintance that you are a day trader. Look at the face and expressions. Full of questions, jealousy and worriedness. Trust me it will be something you will never forget.

    So humans want to have it easy right? Let us put it this way. If you buy an asset and in 5 minutes the price goes higher than that, I’ll give you 190% else none. Same way for selling an asset. This simplicity has garnered lots of neo-traders today, making the Binary Options platform the simplest trading platform in the world.

    What are binary options signals? Read more

    A Zero-sum Game

    Eventually, every option you made settles at $100 or $0; $100 if the binary option purchased is true, and $0 if it turns out to be false(if the amount traded is $100). Therefore, you can lose as much as you can win, 50-50% even odd style. Think of it like a flip of a coin.

    Zero-sum game – a situation in which one person’s gain is equivalent to another’s loss.

    Fees, service or commissions.

    Most brokers will not set Fees or charged service and commissions. They, however, may lower your returns if, your trade positions, came profitable. For example, a particular asset will show you the returns of 94% instead of 100%.

    Nadex contract traded costs $0.90 to enter and $0.90 to exit. The fee is capped at $9, so purchasing 15 lots will still only cost $9 to enter and $9 to exit.

    The expiry aka time frame.

    If in stock forex our biggest enemy is when our equity turned 0 or margin call, in Binary Options the biggest fear is the expiry. So even though the price did eventually go up in 5 minutes, because you set the expiry of your trade for 1 minute its OTM.

    What is the term used OTM and ITM

    OTM refers to out of money. That being said, the purchase or contract dealt by you didn’t give you any returns. Also, means you lost your investment you made on that particular trade for the given selected expiry or time frame.

    What are binary options signals? Read more

    ITM like OTM is the opposite,  in the money. The purchase or contract dealt by you became a profitable investment. You win the investment you made on that particular trade for the given selected expiry or time frame.

    Advantages and Disadvantages

    Unlike the actual stock or forex markets where price gaps or slippage can occur, the risk on binary options is capped. It’s not possible to lose more than what you invested per trade. Binary Options never include spread or Ask and Bid price so it’s easy to determine the value of the underlying asset.

    A little game widget to demonstrate what Binary Options are all about. Courtesy of Expert Option.

    Where to trade and how?

    Nadex if you are from the states. For the rest, IQ Option is a reliable licensed broker.

    Binary Options brokers also include varieties of trading. Digital Options that promised you more than 200% returns if the price of asset you bought goes way higher or the same for the sold asset.

    Visit http://binaryiqoption.com/iq-option/ for more info.

    The trend. Binary Options are cool.

    Go ahead and tell your friends or an acquaintance that you are a day trader. Look at the face and expressions. Full of questions, jealousy and worriedness. Trust me it will be something you will never forget.

    Binary Options gives you the opportunity to be a trader easily. Don’t get it wrong, it’s not easy to earn but it’s easy to be a Binary Options trader.

    Gambling

    Binary Options can be associated with gambling, much like our daily life necessities. For example, “Our teacher James is going to be late more than 5 mins. Wanna bet?”

    In Binary Options, its the same. “Let me tell you Euro Dollar is going to edge more than the US Dollar in the next 5 minute. I put a dollar on my senses.”

    What are binary options signals? Read more

    When we traders are so confident that the said asset or commodity or stock will go up, and it doesn’t. It keeps going against us. Our feelings, or confidence or even pride shaken. We don’t want to admit and keep on it, till the last drop of our penny.

    Don’t forget that egoist moment when all straight 7 predictions of yours go your way. Big fat arrogant smile there.

    Bottom Line – Binary Options summarized

    Binary Options are a simple way of entering the market world, especially for beginners.

    – Profit and loss are capped at the amount invested per trade.
    – Profits are determined by the entry price, the options (buy or sell/call or put) within the selected expiry or time frame.
    – Loss works directly opposite to profits.
    – Risk can be managed by hedge-trade or to pull out trade earlier resulting in a lesser profit or limited lost.

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