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Today I am going to write about binary options. So that you will learn the basics an advantage of trading binary options. I will also write over briefly, how to begin treating these options strategies; read here for additional trading information and options.
Let’s get started and earn money with binary options to get a free and independent lifestyle!
Frist what is binary options?
Well we need to understand traditional option,
An option in finance is the right but not the obligation to buy or sell a security at a specific price on a specific date and time, known as the expiration. Please click here to know what is binary options?
There are two types of options.
- Call option.
- Put option.
1.Call option: Call option either right to buy or call away the security.
2.Put Option: Put option for the right to sell or put the security.
Buyers are both used to call options and put option, pay an amount up front call the premium in exchange for the option rights, the premium represents the maximum loss options buyer.
At expiration the buyer chooses whether or not exercise the option based on where the underlying is treating, in the case of call option the buyers payout is the difference between the price and the underlying asset at expiration and the strike price of the option. Buyers of call options are taking a bullish view on the underlying because the strategy makes money when the underlying goes up,
as you can see from the chart the more the underlying goes up the more profit to the call option buyer. If the underlying is below the strike price at expiration the buyer loses his entire premium for his entire investment.
Similarly it put option payout is the difference between the strike price minus the price the underlying asset expiration, buyers have put options are taking a bearish view on the underlying because the strategy is profitable when the underlying goes down.
As you can see from the chart the more the underlying goes down the more profit to put options buyer. If the underlying is above the strike price at expiration the buyer loses entire premium are his entire investment.
A binary option as a specific type of action back as the name implies has a binary outcome that is only one of two things can happen. For binary call options if the underlying security is about the strike price expiration the action peace out a fixed amount if not then the buyer loses his premium.
so why would a currency trader want to use binary options, it’s very simple currency pairs are not tremendously volatile in order and big profits you need to risk a large amount of capital trading them on a short term basis trading traditional actions requires large moves in the underlying turn big profits.
Binary options allow you to earn profits that are multiple appear invested capital with only a small move in the underlying asset, value in traditional options can be very challenging buyers need to determine not only whether the asset will be above are below the strike price at expiration.
There are some additional features that can be added to binary options:
In this option, the investor predicts that the price of the asset will touch a specific value before the end of the given time.
One Touch Option For example, the trading asset is EUR/USD valued at 1.3500 on Friday. A trading platform such as 24Option can give the investors two options. The call option; meaning that the price of the asset will rise and reach 1.3800 at least once in the next week. The put option; meaning that the price of the asset will fall and reach 1.3200 at least once during the next week. In case you use a call option or a put option and the price touches the specified price then you win.
It works the same way as the CALL/PUT option only that in this case, you select the price at which the asset must not reach before the selected period. Example: Google’s share price is $540 and the trading platform is on the No Touch price of $570 with percentage returns of 77 %. If the price does not reach 570 dollars after the given time, then you have again.
30 Second trading:
The option comprises prediction of a rise (Call) or a fall (Put) in the value of the asset in 30 seconds.
Option+: It is also offered by some brokers and have the option of being bought back. This is a possibility for options that are termed in or out of the money but both represent major variables among brokers.
Boundary Options: These options offer boundaries of a lower and upper definition with a rate that can exist inside or outside of its boundary.Binary options present a unique and easy method of trading price variables in multiple markets on a global spectrum. There are associated risks and it is important that the trader is aware of these risks, as well as the rewards.
Being afraid of trading? we analysed the question when is it easy to earn money? Today I would like to show you a different concern some of you have.
“When I trade I could also end up losing money” because of this fear there are a few customers who just cannot start trade.
I can relate to this feeling, however at the beginning even an expert is no different from any other person. The difference between an expert and a normal person is that the expert continues to trade and improve step by step.
Everybody was not able to walk after they were born as a baby However, through practicing to walk every day you become able to walk. So when you wouldn’t practice to walk at all, and only try to do it after once after one year what do you think would happen? You wouldn’t be able to get up and walk.
It is the same for trading. Which is why even if it’s only with a small amount you should continue to trade every day and improve step by step as this is the only method to get better.
More than half of all people who are earning money through investing now were at first not able to get results and were also troubled by this. But by improving step by step the efficiency increases and you gain a certain know how and become able to earn money.
That is why you should not be afraid to trade and try to continue. So even when it doesn’t go well at first, you only have to take it back your losses afterwards.
The more experience you gain the bigger of an advantage it becomes, so at first it might be hard but please try your best and continue!