Trading Binary Options Explained

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Simple Way To Understand Binary Options Trading

Binary Option Trading is a fancy way of saying ‘All or Nothing’. In fact, that is another name for these trades, as well as Digital Options and Fixed Return Options (FROs). Binary (two) Options means you have two options, you either get a fixed amount of cash or a share of some sort of asset (like partial ownership of a business or a house), or you get nothing at all. This is a bet. You are betting that a certain stock will be more valuable at the end of the agreed upon time, than it was at the beginning. For example, you may make a bet with another trader that a stock you buy at $100 will be more valuable by the end of the trading day. If you win, you get $1000. If you lose, you get nothing. If, at the end of the trading day, the stock is worth more than $100, you won the bet, if less, then you lost.

History Behind Binary Options Trading

Since mid-2008, a number of sites have begun to offer binary trading options, and there are now many that are devoted to binary trading only. Though these sites may use carefully picked terminology and legal maneuvering to legalize their business, they are, in effect, sites where you can bet on the flows of the stock market. Most of these sites are based in Cyprus, and have escaped most regulation. On May 3, 2012, the Cyprus Securities Exchange Commission announced that binary option platforms will have to be regulated by the CySEC. Before this announcement, binary options trading platforms were not guaranteed to cycle money through a trust, nor to employ a neutral third party to verify all trades, making them extremely shady places to do business.

Now, if you’re a follower of the market you may be more intrigued than warned off if you think you can accurately predict the fortunes of stocks. The first thing to know is that you have to choose correctly more than half the time (appx 55% to 60% depending on the site) in order to break even, let alone profit. Secondly, these sites often restrict the betting time to extremely short intervals, such as 5 or 10 minutes. This has two effects. First, it means that it is easy to lose track of how many bets you are making, and how much money you are losing or winning. Second, no one can accurately predict the behavior of stocks over such short term time frames, and certainly not 55% of the time that you would need to even break even with the site.

My Advise Trading Binary Options

So, don’t “invest” any of your money in Binary Trading Options if you don’t know how to trade. If you are still eager to trade, you need at least to get good information that are already there on Youtube or online there’s sufficient info out on the internet. Trade small so you don’t loose all your money. Choose a broker that is popular within the trader community I recommend 24Options that you can use to win up to 80% of your trades.