When trading Binary Options, there are only two possible outcomes of a trade. These results are binary by definition, as each investment will result in the trade either landing ‘In the Money’ or ‘Out of the Money’. Landing ‘In the Money’ means that you have won your trade and will receive whatever return-on-investment, ROI; your Binary Option broker is willing to provide.
Binary Option brokers average ROI rates as high as 95% on standard Binary Option trades and over 700% on One-Touch (weekend) trades.
With Binary Options, landing ‘In the Money’ equals a different ROI depending on what option is purchased. Binary Options are a type of trading system where investors are able to purchase an option with the ability to sell it at a set price in the future.
This is how Binary Option Trading works:
If you purchase an option, and make an accurate prediction, then your trade lands ‘In the Money’ and you’re a winner. It’s really that easy. Binary Options only require traders to distinguish if the asset (stock, commodity, index or currency pair) is going to go up or down.
Trading Currency Pairs
When the option is purchased there is a Set Price, which is the value that the asset holds throughout the life of the option. Binary Option trades tend to be most profitable on short-term bases, 60 Second Trading, but there is the ability to make money on longer term investments. As a day trader you have to select either Call (up) or Put (down) depending on how you feel the asset will move.
When a Binary Option trade is made you’re essentially entering into a contract that will allow you to sell your option at a future date with a set price. The only thing that you, as a day trader, have control over is whether you select Up or Down when you purchase the option.
Example: If you believe that the asset’s price value will drop, then you would choose a Put Option. When trading Binary Options you can make a profit, even if the asset’s value falls, as long as your forecast was true.
Binary Options traders are not concerned with how far an asset moves from the Set Price. It simply doesn’t matter to us, we only need to make an accurate prediction on the direction that the asset will move. If an asset moves a by single Pip in the proper direction, then the trade is seen as a success meaning that you landed ‘In the Money’.
Binary Options are designed for simplicity, especially in today’s high tech age where investors can log in and make trades from their smartphones. Of course, Binary Options can be traded from your home desktop or laptops as well.
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