Not so long ago, a new tool for exchange trading appeared on the financial markets – binary options. However, for Internet users this name says nothing and so they go in search and ask the phrase what are binary options, we will try to answer this question in detail. What are binary options in the global financial market? Let’s try to understand this topic.
As you know, the world market is constantly changing the exchange rates, the price of oil, precious metals and other assets that are in constant high demand. Binary options are based on continuous changes in the prices of various assets and currency rates. A binary option is a bet on the expected price change over a certain period of time. The time is set by the trader, and it can range from 1 minute to several months. If the forecast was correct, then the “net” earnings can amount to 50 – 90% of the bet amount.
Binary options is one of the types of exchange contracts used for making a profit on movements in the price of assets (currencies, stocks, commodities) in the world’s financial markets. The buyer of a binary option at the moment of purchase makes a prediction on how the price of an exchange-traded asset will change. This exchange instrument has a fixed price, a predetermined time of expiry of the transaction and the amount of possible profit. Depending on the correctness of the fulfillment of the stipulated condition at a certain time can bring the trader a fixed profit or nothing at all.
To increase earnings and simplify the process of binary options trading, experienced traders use strategies and signals that increase the chances of a successful outcome of each trade and increase profits and income.
Binary options types
- Above / Below – refer to the standard types of binary options. Above / Below – also known as Put and Call, these are the most common types of binary options offered by most brokers.
- 60 Seconds (Turbo Option) – This is a kind of regular option with an expiration time of 60 seconds (one minute). Rather known type of options among scalpers. Due to the high degree of unpredictability of price movement on the minute charts this type is not recommended for beginners.
- Digital option with a fixed profit, the profit of which is predetermined in the contract. A traditional type of derivative which provides for the formation of monitoring where the price will be in a specific time interval: above or below the current level.
- One Touch – it is characterized by a rather high degree of profitability (up to five hundred percent).
- Range – The principle of trade is simple, whether the price stays within a certain range or not. In case the price stays within the range, the trader receives the profit.