What is binary option

What is binary option for trader

What is binary option ? Binary options, also known as digital options or fixed return options are a relatively new, simple and profitable type of investment. Binary options have been available to trade for a number of years as a semi-official investment product, accessible only to banks and large financial institutions in the over-the-counter market. Since 2008 binary options trading has become available to the public and widely traded online. Its simplicity and high returns make it the simplest method of trading, appealing to anyone with little or no financial knowledge or experience. When trading binary options, investors forecast which direction an underlying asset will move by the time of expiry, rather than actually purchasing the asset itself.

There can only be two outcomes to a binary options trade. A trader either receives a predetermined return if his prediction of price movement is correct at the time of the contract expiry. This outcome is called “in-the-money”. Or, if a reader’s prediction is incorrect at the time of the contract expiry, which is called “out-of-the-money”, a trader loses his investment. And this is also What is binary option question.

In rare cases, there is also an “at-the-money” scenario that means an option’s strike price is identical to the price of the underlying asset at the time of the contract expiry. In this situation the investment is returned without profit or loss.

The predetermined return on a binary options contract can be anything from 75-85% and a trader can choose from a variety of assets, such as stocks, currencies, commodities and Indices.

The expiry time of a contract can be anywhere between 30 seconds and one month.

One of the greatest advantages of binary options trading is that both the return and the expiry time are known in advance that makes decision making process relatively simple.

Transactions occur through a secure online connection, and traders can get started right after opening an account and depositing funds.

What is binary option

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To invest with binary options you will work with an investment broker who is licensed to work in this field. Working with your broker, you will identify which asset you want to buy an option on, how much you want to invest and when the option will expire. Once the option is placed, you simply watch the trading activity on that asset to see if your prediction was accurate or not.

Binary options are one of the most popular trading choices for investors today, due in large part to their simplicity and the fact that you always know all the risks and payoffs ahead of time.

  • regulated: we promote only regulated brokers whose business models and marketing practices are checked by relevant government authorities.
  • special features: here we list all the important features that a broker offers. These are usually listed as perks offered trough various account types which bring different levels of service, depending on the minimum funds deposited
  • bonuses: almost every Top Binary Options Brokers offers these rewards that increase trading potential. Fair Binary Options also lists terms and conditions that come with the bonus money so traders always know how will these affect their trading efficiency.
  • the best binary trading platforms reviewed: we review the software that makes trading possible. There are several big providers, such as SpotOption, TechFinancials, Tradologic, MarketsPuls… Every software has some special characteristics, and not every software is suited for every trader
  • assets: Fair Binary Options review provides basic info on the amount of assets available for trading
  • customer support: we chat with the customer support to test how the broker has set up the help desk that should support traders. This is the best way to assess the service.
  • payments: we list all the payment options available by the Top Binary Options Brokers, list minimum deposit requirement
  • withdrawals: we warn traders if withdrawal requirements are too high, or if it takes a long time to get the money back.
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