Trading in Binary Options has grown in leaps and bounds in a few short years and its among the online traders who have been leading the pack.
One reason may be is that Binary Options is a straight forward bet compared to traditional trading. It leaves behind the worry of actually buying and possessing something.
If you own it, you have to take care of it, right? Not so in the world of Binary Options. You make your pick, up or down and you either win or lose. But let’s slow it down a bit for the moment, it would be fool hearty endeavor to go in without know what it is you’re trading on.
Be an educated consumer, dig a little deeper, maybe a lot deeper, and find out what Binary Options are all about.
What are Binary Options?
This is fairly simple, the word binary means “having two parts.” Or to be more precise, when applying the word binary to trading in Binary Options, it’s the prediction of rises and falls in the market (stocks, commodities, indices or currencies).
And to be even more precise, the predictions for rises and falls in industry jargon, are known as “Calls and Puts.” When placing a “Call” on a preferred trading option, the prediction being made is for a rise in price. The opposite is true when placing a “Put” on a preferred trading option, therefore a fall in price is the prediction.
Now, what follows isn’t quite as simple as grasping the concept of Binary Options. Making a prediction sounds easy, but making a prediction based on knowledge concerning the movements of something as complicated as the modern markets, is akin to predicting the weather.
What Segments of the Market are available to Binary Trading?
Now that you know what a “Call” and a “Put” is, the next question is what can you can place a “Call” or a “Put” within the market. Ultimately this question will be dependent on the broker you chose to trade with, but generally speaking, the trading option before you will be between; Fortex (currencies), Stocks (publicly traded companies), Commodities (consumable goods) and Indices (markets).
Forecasting Movements of the Market
This is where the grunt work comes in, finding a broker, read blogs, asking questions, taking part in online conversations, read the Financial Times and the Wall Street Journal. Figure out what segment of the market to focus your attention to. Understand how the world around it affects it’s movements. When you’ve done that, then you’ll ready to make your first “Call or Put” option prediction. Remember, being smart is only possible if you do your homework. Happy Trading!
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