Benefits of Trading Binary Options

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Binary Options Benefits

You have been probably hearing about binary options a lot in recent times. Their simplicity took over the world and they became a popular choice of trading for many.

If you are asking yourself why they are so popular and what are the benefits you can experience, you are at the right place to learn!

Binary options provide traders with the ease and the accessibility to trade on the market and earn by enabling them to invest from any place without having a lot of experience in the field.

Let’s take a look at the benefits you can experience with binary trading!

1. Simplicity

If you have came across any trading platform available online, you can conclude for yourself that binary trading is the simplest thing you can you.

You simply have to guess the direction in which the asset’s price will go, and make your investment according to it.

Even if you do not have much experience, you can learn as you go and start with small investments in the beginning.

Besides the High/Low binary options, the other options available to you are also very simple to use, meaning that you do not have to a genius to understand the concept.

2. Return on Investment

Of course, when going into the world of binary trading, the biggest motivation for doing so is the return on investment.

Binary options trading involves risks, and of course, you can sometimes lose the investment you made.

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Still, binary options trading is about earning, and depending on the asset you have chosen, you can win big. The return on investment on certain assets can be small, while on other assets it can go up to 70%.

3. Controlled Risk

You are totally in control over your finances when dealing with binary options.

The risks are known even before you make an investment since you are only risking to lose what you invest, and not all the money you have deposited.

This means that the risk is controlled by you, and that you will never, by any chance lose more than you invest.

4. Adapt to Changes

Binary options trading allows you to follow the changes which occur on the market and adjust your strategy accordingly.

It is clear that the market does not stand still, and that even drastic changes can occur depending on the current events.

Keeping that in mind, this means that the investor can do changes in their strategy according to the movement of the market in order to maximize profit.

5. Invest as Much as You Would Like

Binary options trading is meant to be for everyone, meaning that even those who cannot afford to deposit thousands of dollars can still become traders.

Binary options brokers offer the possibility to invest as little as $1! You can start with such small investments, gain experience and earn money by not risking too much, and then step up your efforts as you go.

6. A Vast Variety of Assets

By trading with binary options, you have access to many different assets which you can choose from.
Of course, the outcomes for some of these assets are easier to predict than others.

Being a binary options trader means that you can choose to invest in whatever you are comfortable with and whatever you have the greatest knowledge of.

7. Easy to Access

Becoming a binary trader is as simple as 1-2-3! The majority of brokers provide a quick and easy sign up, and also different deposit manners which you can choose from and start trading.

8. Even When on the Move

Since we live in the digital era and we are used to having everything at our disposal in a matter of seconds, binary options brokers made it easy for traders to access the market even when they are on the move.

All you need in order to trade is a computer, a tablet or a smartphone and of course, an internet connection.

The majority of brokers offer apps for both Android and iPhone, meaning that you can still trade even while you are on the move.

9. Gain Experience

The fact that binary options trading can be done with as little as few dollars means that you have some space to experiment and see what will work best for you.

You do not have to invest much in something that you are not sure it will work, but with every investment you gain experience which will help you when you want to make bigger investments and earn more.

As presented here, binary options trading offers many benefits for traders. The most important thing is that they are simple to use and understand, and that you are the one who is in control of the pace.

If you think that binary options trading is a thing for you, check out our broker reviews and find the right broker to start trading with!

A Guide to Trading Binary Options in the U.S.

Binary options are financial options that come with one of two payoff options: a fixed amount or nothing at all. That’s why they’re called binary options—because there is no other settlement possible. The premise behind a binary option is a simple yes or no proposition: Will an underlying asset be above a certain price at a certain time?

Traders place trades based on whether they believe the answer is yes or no, making it one of the simplest financial assets to trade. This simplicity has resulted in broad appeal among traders and newcomers to the financial markets. As simple as it may seem, traders should fully understand how binary options work, what markets and time frames they can trade with binary options, advantages, and disadvantages of these products, and which companies are legally authorized to provide binary options to U.S. residents.

Binary options traded outside the U.S. are typically structured differently than binaries available on U.S. exchanges. When considering speculating or hedging, binary options are an alternative—but only if the trader fully understands the two potential outcomes of these exotic options.

Now that you know some of the basics, read on to find out more about binary options, how they operate, and how you can trade them in the United States.

U.S. Binary Options Explained

Binary options provide a way to trade markets with capped risk and capped profit potential, based on a yes or no proposition.

Let’s take the following question as an example: Will the price of gold be above $1,250 at 1:30 p.m. today?

If you believe it will be, you buy the binary option. If you think gold will be below $1,250 at 1:30 p.m., then you sell this binary option. The price of a binary option is always between $0 and $100, and just like other financial markets, there is a bid and ask price.

The above binary may be trading at $42.50 (bid) and $44.50 (offer) at 1 p.m. If you buy the binary option right then, you will pay $44.50. If you decide to sell right then, you’ll sell at $42.50.

Let’s assume you decide to buy at $44.50. If at 1:30 p.m. the price of gold is above $1,250, your option expires and it becomes worth $100. You make a profit of $100—$44.50 = $55.50 (minus fees). This is called being in the money. But if the price of gold is below $1,250 at 1:30 p.m., the option expires at $0. Therefore you lose the $44.50 invested. This called out of the money.

The bid and offer fluctuate until the option expires. You can close your position at any time before expiry to lock in a profit or a reduce a loss, compared to letting it expire out of the money.

A Zero-Sum Game

Eventually, every option settles at $100 or $0—$100 if the binary option proposition is true and $0 if it turns out to be false. Thus, each binary option has a total value potential of $100, and it is a zero-sum game—what you make, someone else loses, and what you lose, someone else makes.

Each trader must put up the capital for their side of the trade. In the examples above, you purchased an option at $44.50, and someone sold you that option. Your maximum risk is $44.50 if the option settles at $0, and so the trade costs you $44.50. The person who sold to you has a maximum risk of $55.50 if the option settles at $100—$100 – $44.50 = $55.50.

A trader may purchase multiple contracts if desired. Here’s another example:

  • NASDAQ US Tech 100 index > $3,784 (11 a.m.).

The current bid and offer are $74.00 and $80.00, respectively. If you think the index will be above $3,784 at 11 a.m., you buy the binary option at $80, or place a bid at a lower price and hope someone sells to you at that price. If you think the index will be below $3,784 at that time, you sell at $74.00, or place an offer above that price and hope someone buys it from you.

You decide to sell at $74.00, believing the index is going to fall below $3,784 (called the strike price) by 11 a.m. And if you really like the trade, you can sell (or buy) multiple contracts.

Figure 1 shows a trade to sell five contracts (size) at $74.00. The Nadex platform automatically calculates your maximum loss and gain when you create an order, called a ticket.

Nadex Trade Ticket with Max Profit and Max Loss (Figure 1)

Five Advantages of Binary Options Trading

By: Hillel Fuld

The financial world is overflowing with markets. There are so many trading arenas a person can choose from, so how does one make that selection? The answer to that is of course a complicated one, just like everything else in the financial world.

The most important thing to consider when deciding what kind of trader you are, is deciding what kind of person you are. Not all markets are right for all people. For example, the Forex market is known for great risk due to its volatility, but the reward is as great. So, before trading Forex, you must decide if such a balance works for you.

When it comes to Binary Options, there are many characteristics that make trading Binary unique. The following is a list of five traits that characterize the Binary Options trading arena, and make it the attractive option that it has become to so many traders:

Instant Gratification: While some people might have more patience than others, everyone enjoys making a quick buck. While most other markets talk in terms of days, weeks, and months, Binary Options operates in intervals of minutes and hours. You can place a Binary Option and be collecting your profits within the hour. Trading Binary Options is a quick and easy way to make money.
Simplicity: Anyone who has any experience in the world’s financial markets is familiar with the complex indicators, charts, analysis, and tools that accompany your trading. Whether you are a believer in fundamental or technical analysis, a lot of preparation goes into trading the markets. I do not want to say that trading Binary options requires no research, that would be false, but at the end of the day, you are predicting whether the instrument will increase or decrease, period. Amounts are irrelevant, numbers are nowhere in the equation, it is as simple as you can get. You place a Call Option and the price of the instrument goes up, even by a cent, you make your profit. On the flip side, if you make a Put Option and the price decreases, the profit is yours. Can’t get much simpler than Binary Options.
Flexibility: With Binary Options, you are not limited to one market. You can trade Forex, indices, commodities; it is all available to you within the Binary Options style of trading. So, if you want a flexible option, one that will enable you to trade on multiple markets, Binary Options is for you.
Transparency: Who has not encountered unexpected losses in the markets? Who has not suffered from the economy taking a sudden nosedive? With Binary Options, there are no surprises. You know how much you an lose and how much you can make. This lets you trade with ease and in relaxed mode, which is the way you should always be when trading money. With Binary Options, profits and losses are known up front.
Scalability: In continuation to bullet three, Flexibility, trading Binary Options gives you the ability to learn about the various markets, with a minimal financial risk. You can enjoy all the above benefits, while turning your Binary trading into a learning experience.

In conclusion, Binary Options have a lot to offer the retail trader, and it is the above reasons that are causing the growing popularity of the Binary Options trading arena.

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  • Binomo
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