Cryptocurrency options. New Era of binary options

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Sign-up Bonus:

  • Binomo
    Binomo

    Good Choice For Experienced Traders!

Cryptocurrencies and binary options – faster and more profitable?

Cryptocurrencies, binary options are modern ways of obtaining speculative and investment profit. Consider the pros and cons of crypto and binaries, and how to make money.

The claim that we live in a very fast changing world has long been hackneyed. Another question is that people by nature are quite conservative, and it’s very difficult to get a person moving. But the changes that are taking place around, including in technologies for generating profit, are simply impossible to ignore.

Profit twice as fast

At one time, one of the favorite tricks of Sberbank employees was a quote from “Alice in Wonderland”: “You need to run as fast just to stay in place, but to get somewhere, you must run at least twice as fast.”

A couple of decades ago, trading was very conservative and looked more like a classic buy-and-hold investment. However, now there are products that allow you to get fairly quick profits based on classic trading rules.

Today we’ll talk about two tools that are suitable for extraction quick profit, – binary options and cryptocurrencies. The main thing to remember is that no one has repealed the laws of economics, and often such profits are accompanied high risk of loss of funds.

Yes, we will not argue that cryptocurrencies can be considered as a source of more conservative investment income. But we will be cunning if, with volatility so characteristic of crypto-exchanges, we will consider them only from the point of view of investment. We all start with binary options.

What is binary options?

The definition of a binary option is very simple, it can be found in almost any economic literature on derivatives or derivative financial instruments. We will give one of them.

Binary option – agreementin which the seller of the option is obligated to pay the buyer a certain amount if a negotiated event occurs by the time the option is exercised. If it does not occur, the seller of the option pays nothing to the buyer.

The event that occurs at the time the option is exercised can be absolutely anything. In general terms, this is the movement of the price of an asset selected by a trader above or below a certain price value.

It looks like this:

  1. the trader chooses a financial asset that is convenient for him. As in the case with other derivatives, such an asset can be currency pairs, the same cryptocurrencies, stocks, stock indexes, goods . In a word, almost everything.
  2. After choosing an asset, the trader indicates the amount – in fact, the price of the option, and the time during which the option will be valid.
  3. Then you need to correctly predict the direction of movement of the asset. As when opening a “long” or “short” position with exchange-traded instruments, in order to make a profit, the trader must correctly determine whether the selected asset will fall or grow.
  4. After the transaction, the price of the asset is fixed. Drawing an analogy with a classic option, this is the strike price.
  5. If by the time the option expires, the trader correctly predicted the direction of the price movement, then he receives a fixed percentage of profit to his option price. If he made a mistake, then the lost amount is 100% of the option price. Therefore, as in classical trading, the formula works here: higher risk – higher profitability, lower risk – profitability is also lower.

Making Binary Options Profits

In general, there are two options for correctly predicting price movements and, accordingly, making a profit on binary options.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Sign-up Bonus:

  • Binomo
    Binomo

    Good Choice For Experienced Traders!

  1. The first option involves active analysis of the market situation fundamental and technical methods for predicting short- and medium-term market behavior.
  2. The second option, in our opinion, is more popular among traders and involves the use of two main advantages of binary options – time and distance, which the price of the selected asset should “go through” (we will talk about these advantages below).

The second option is called trade “on the news”. The fact is that quite often the market reacts not to long-term macroeconomic forecasts, but to momentary events.

We give a simple example of transactions on the news

The news on good economic growth in Russia (high GDP) will be positively received on the market. And traders are likely to buy the Russian ruble, which will lead to its growth against other currencies.

This movement can be very short-term and almost elusive for the layman. However, for a binary options trader, this can become a real “gold mine” (unless, of course, such a trader learns to correctly evaluate certain events).

News about economic growth, inflation, unemployment and other macroeconomic indicators are constantly published. The time of publication of such news is 99% known in advance and is reflected in special economic calendars. Using these calendars, traders carry out transactions with binary options, short-term working to increase or decrease the market – depending on their assessment of the situation.

Advantages and disadvantages of binary options in terms of profit

It is undeniable that binary options are a very controversial tool. But the same can be said about almost any financial instrument used in speculative trading. And before moving on to cryptocurrency, we’ll talk about the pros and cons of binary options. Let’s start with their negative sides.

Cons of binary options

High risk of capital loss

Yes, statistics are merciless. As well as in trading on the stock market, on the foreign exchange or on the derivatives market, there is a very high probability of losing your funds. The simplicity of binary options does not completely eliminate their riskiness, therefore, to think that they can be a source of “easy money” is, at least, naive.

Time factor

Alas, there are plenty of tools for predicting the so-called price movement goals (for example, “fair price” in the fundamental or support / resistance level in the technical analysis). But time forecasting tools in both types of analysis are extremely few. Even correctly predicting the direction of movement of the asset, the trader may make mistakes over time, which is critical in binary options and may result in losses.

Lack of regulation

Indeed, the binary options industry in Russia is not regulated by anyone. This means that for a trader the issues of protecting their funds and frequently arising conflicts of interest “broker-trader” also come to the fore.

Pros of binaries

The simplicity and accessibility of the “mechanics” of binary options

To understand the principle of bargaining and making a profit, in fact, is not difficult. In addition, the range of assets on which binary options can be acquired is very wide: stocks of both Russian and foreign companies, any indexes and any currencies, etc.

Transaction costs

Imagine that you wanted to buy shares in a company. Unfortunately, we must be prepared for the fact that the acquisition of securities will lead to associated costs. First of all, this is a commission. Binary Options Broker for the purchase and in some cases the depositary commission for accounting for securities. Binary options exclude such commissions, and your associated costs will be zero.

Time

Yes, we remember that it is written by us in the shortcomings of options. But, on the other hand, it is also their dignity. What other financial instrument, in addition to binary options, will allow you to earn, for example, 100% of the invested amount in just one minute?

Trading “on the news”, which we spoke about earlier, suggests the possibility of using a very short reaction time of the market to macroeconomic events. For binary options, this is enough for you to earn.

Distance

If you have already been engaged in trading, then you probably know that your income directly depends on the distance that the price “travels”. But what if the asset, which you considered promising and acquired for your portfolio, moved only a couple of percent up? It is possible that this move will not even cover transaction costs.

In binary options, however, this is out of the question. The profit that the trader receives does not depend on the distance the price goes.

That is, if the direction of the asset’s movement is predicted correctly, the most insignificant price change in the direction necessary for the trader is enough.

Undoubtedly, the binary options industry will continue to remain attractive for both beginners and professional traders. But literally not so long ago, another product appeared that caused genuine interest among many people – cryptocurrencies.

Cryptocurrency Earnings Approaches

The cryptocurrency market, of course, has a number of features compared to more mature, mature markets: increased volatility, less liquidity, the ability to generate excess returns.

However, if we consider the general principles of profit-making, working with cryptocurrencies is not much different from investing or speculating in other assets.

Hold is not for crypto

Exist investment approach “hold” (or “holding”), in which the user buys cryptocurrency and “forgets” about it. It does not trade, but simply waits a long time until the asset grows in value. True, in the current realities, this is undoubtedly not the best strategy. The market is just starting to develop, and there are no guarantees that the coins will survive the price volatility.

A striking example is the dynamics of the reference bitcoin. After the most powerful growth in 2020, when in December its value exceeded $ 19, bitcoin sharply rushed down. Already in February 000, the value of the coin was only $ 2020.

Now imagine how the “holders” are now feeling who bought the coin at the peak price in December 2020 (unless they are Zen Buddhists, of course)?

Portfolio and rebalancing

The optimal solution for the investor is the creation of a cryptocurrency portfolio and its constant adaptation to market realities.

Due to fluctuations in digital money rates, the market situation is constantly changing. Therefore more it is beneficial to carry out regular rebalancing of the portfolio, adapting to the situation in the industry, than just keeping the asset for a long time.

Moreover, the more often the rebalancing occurs, the greater the profit. If you adapt the portfolio every day, yield will be almost five (!) times higherthan in the case of adaptation once a month. However, this scenario of working with digital money is not suitable for everyone. This requires large investments and professional knowledge and experience.

Cryptotrading

Another approach to profit from cryptocurrencies is trading or speculating on the difference in exchange rates. It is available for both beginners and professionals. And here the high volatility of digital money, complicating the life of an investor, will only help the trader.

With this approach, you do not need to deal with the physical purchase and storage of coins. Only need choose a brokerthat you trust, and spend some time researching and analyzing the market.

The advantages of this approach: the ability to trade every day, a low entry threshold and a wide selection of trading instruments – from classic margin trading of the “forex” type to digital options with fixed income. As they say, for every taste and opportunity.

Read about trading and investing opportunities in our Facebook feed and Telegram channel!

Nikolay Dudchenko

Financial Analyst Nikolay Dudchenko. Experience in the financial markets – since December 2006. During this time I tried myself in the stock and foreign exchange markets. It prefers long time frames and sometimes uses fundamental analysis when making decisions. Trading styles – swing and positional trading. Technical analysis – Fibonacci levels, wave and indicator analysis.

Cryptocurrency options. New Era of binary options?

Cryptocurrency Brokers. Pick the ideal Cryptocurrency Brokers may be more difficult as it looks, because of the countless selection and the different needs of each and every dealer. This is why we listed below the key factors That You Ought to keep in mind when making your choice:

Standing and years of experience

Despite not really being the sole factor worth considering, the range of years that the cryptobroker has available may offer you a good degree of confidence to the ability and trustworthiness of the provider. Before picking a cryptobroker over the following one, make certain to check out its history, while it’s possessed by yet another group, whether it recently had a mix or acquisition along with its own standing.

We have selected some of the best crypto brokers where you can also trade binary options, forex, CFDs and ETFs! Cryptocurrency Brokers

Broker Bonus Min Deposit Payout US Traders Review Open Account
up to 100% Deposit Bonus + First 3 Trades Risk Free! CRYPTOCURRENCY, BINARY & CFD BROKER! 250$ up to 90% Review Visit Broker
10,000$ Binary Options Free Demo Account Without Deposit 10$ up to 98% Review Visit Broker
50% up to 2500$ and More Promotions and Bonuses from time to time 10$ up to 180% Review Visit Broker
100% Deposit Bonus, 5 Risk Free Trades, No Deposit Fees and 1000$ Free Binary Options Demo Contest Each Month 100$ up to 85% Review Visit Broker
30$ Forex No Deposit Bonus, 50% deposit bonus up to $500 and 20% deposit bonus up to $5000! Free Trading Signals! Trading bonus are not eligible for clients registered under Trading Point of Financial Instruments Ltd and Trading Point of Financial Instruments UK Ltd. 5$ Review Visit Broker
1,000$ Free Demo Account Without Deposit, 100% Deposit Bonus, Risk Free Trade 10$ up to 92% Review Visit Broker
Free Demo Account Without Deposit & Great Trading Contests (*) Tournaments are subject to Terms & Conditions and EU customers can’t access Trading Tournaments 10$ up to 92% * Amount will be credited to account in case of successful investment Review Visit Broker
$100 Smart Options No Deposit Bonus (in ETH), 0.10 ETH for Regular Account | No Deposit for Wallet Account up to 83% Review Visit Broker
50$ Binary Options No Deposit Bonus, 10,000$ Binary Options No Deposit Demo Account & 150% Deposit Bonus! Free Trading Signals! 50$ up to 96% or up to 128% with Strike Prices Review Visit Broker
Binary Options No Deposit Crypto Bonus – Real 10,000 Satoshi & 100% Deposit Bonus NO MINIMUM DEPOSIT AMOUNT up to 91% Review Visit Broker

Service

When selecting a cryptobroker, then you need to think about the additional services offered as well. In our experience that the very important ones are the access to top quality knowledge material and a 24/5 or even 24/7 customer services. This will allow you to exchange with confidence, using the peace of mind of always being ready to obtain the support required independently from your degree of time and expertise of the day.

Compliance and Legislation

Lastly, It’s always very important to test if your Selected Cryptocurrency Brokers is governed, so as to fully grasp the way the ethics Of this current market, traders, and investors are protected. The regulatory figure may vary depending on the countries the broker is enrolled in. Some Typical cases will be the Financial Conduct Authority (FCA) at britain, The Cyprus Investment Company (CIF) as well as the Exchange Commission (CySEC). We always advice to open an account with a regulated broker.

Financial traders have a diverse range of markets to choose from. These includes forex, stocks, CFDs, indices cryptocurrencies and options. Binary options are relatively new compared to other financial instruments (except cryptocurrencies). However, many traders consider them high risk. Some will even label options trading the same as gambling.

The truth is, any form of financial trading involves risk. Money can be made or lost regardless of the type of financial instrument you’re trading.

As more traders realize this fact, they’re turning to options trading as a way to make money. Online options brokers are now attracting millions of traders from all over the globe.

But what’s making binary options so popular? Below are six reasons.

You can make money whether the markets are trending or not

Most financial markets will only make you money when the markets are trending. For example, if you’re trading stocks, you can only make money if the price goes up or falls relative to the strike price. In addition, the price change must be significant enough for you to make a good profit.

With options you can profit regardless of market direction

Binary options are much different. All you need to do is predict whether the price will be higher or lower after a certain amount of time. Since options have a fixed return, a small change such as 0.001 in the direction you predicted will earn you profits of up to 90%. This comes in handy when markets are ranging. That is, the asset’s prices are experiencing small price movements.

Investing in binary options doesn’t require a huge investment

One of the reasons why options brokers are increasingly becoming popular is the low deposits they require to get started. You can easily open an binary options trading account for as little as $5. In addition, you can open an options position with as little as $1. With returns of up to 90%, a $1 trade can make you $.90 within a short amount of time.

Assets such as stocks and cryptocurrencies bought in exchanges require a huge investment. For example, if you wished to buy Bitcoin, you would need to pay at least $5000 for a single coin. In addition, you don’t know whether the Bitcoin value will increase in the near future.

Binary options offer a fixed return

Another reason why binary options are so popular is that you know the potential profit even before you open your trading position. This is calculated as a percentage of the amount you invest in a trade. Most platforms offer returns ranging from 60% to 95%.

The return depends on the assets you’re trading and volatility. This means that returns on a particular asset will change during the day. Knowing this, you can easily choose to trade during sessions where your trading platform offers the highest returns. This ensures that even if your trades end up losing, you can easily recover these losses through several winning trades.

The profit you might earn when trading other financial instruments largely depends on the asset’s price movement. If the price moves further in the direction you predicted, the higher your profit and vise versa.

The maximum you can lose is the amount placed on a trade

In addition to knowing how much you can earn through profitable options trades, you also know how much you stand to lose even before you enter position. The maximum amount you can lose on an options trade is your trade investment. Some brokers such as IQ Option also allow you to exit trades before they expire.

If the trade was turning a profit, IQ Option will give you a portion of what you were to earn. If it was losing, a portion of your trade investment will be deducted. This is called profit after sale. For example, if you had invested $10 in a trade with 80% return and the trade goes your way, you might decide to exit before trade expiry.

In such a case, IQ Option could give you $3 to $5 as profit and keep the remainder. If the trade was losing and you decide to exit, IQ Option might deduct $3 to $8 from your initial investment. This allows you to avoid losing the whole $100 investment.

Loses are limited with options

When trading financial instruments such as forex and commodities, you stand to lose more than your trade investment. If the trade goes against you, your percentage losses might exceed 100%.

At this point, your broker will use your account balance to keep the trade open. That’s why it’s always advisable to use stop losses when trading such markets.

Trading options is easy to learn

Some traders will argue that options trading is hard. But this isn’t the case. Options traders will use the same charts, tools and trading strategies used by traders in other markets. In order to succeed as a binary options trader, you must learn how to read charts, use indicators, have a trading strategy and understand trading psychology. Traders in other markets must also do the same.

Learning options trading is easy

The interesting thing is that, traders who have experience in other markets such as forex often find options trading quite easy.

You can earn profit in as little as 1 minute

In most markets, you’ll have to wait until the underlying asset’s price reaches a predetermined strike price. This can take seconds, minutes, days or even weeks. Binary options are designed such that you can make profit in as little as 1 minute (Note: we don’t recommend trading short expiry times).

The reason for this is that options are set to expire after a specified period. In addition, all you need to predict is whether the price will be higher or lower than the strike price upon expiry.

That’s it about why binary options are popular. Do you have any additional reasons why we should trade option with IQ Option? Kindly share them in the comments section below.

Best of luck in your trading!

How useful was this post?

Click on a star to rate it!

Average rating 4.7 / 5. Vote count: 14

No votes so far! Be the first to rate this post.

As you found this post useful.

Follow us on social media!

We are sorry that this post was not useful for you!

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Sign-up Bonus:

  • Binomo
    Binomo

    Good Choice For Experienced Traders!

Like this post? Please share to your friends:
Best Binary Options Trading Guide For Beginners
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: