As the ‘binary’ in their title implies, binary options are a type of trading that requires traders to choose between two outcomes. In the case of binary options, the trader is required to guess whether a commodity, currency, index or stock will rise or fall at the end of a given period of time. If the trader believes that it will rise, they will buy a ‘call’. On the other hand, if they believe that the market is falling they will purchase a ‘put’.
One of the great things about binary options is that they are a relatively straight-forward way of trading as the trader only has to decide whether the market will rise or fall. This makes them a particularly popular choice for novice traders.
With binary options, the risks and rewards involved in a trade are very clearly laid out, allowing traders to know exactly where they stand. Again, this clarity is very attractive with traders.
If you can develop a strategy or a system which make sure that you are correct more than 70% of the time, there is the potential to make some serious cash, especially on financial options which seem to sport the most lucrative returns.
There are a number of online trading sites that specialise in binary options and have online platforms, allowing you to trade from the comfort of your own home or on your smartphone.
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If you are confident that you want give binary options a go, here are some things that you should take into consideration before putting down a deposit: