What are Binary Options?
If you’re completely new to binary options then you’re probably asking yourself this exact question. Binary options trading is trading on the future movement of certain assets. In binary trading, you, as a trader, will have the task of predicting the movement of certain assets.
Do I have to actually buy assets in binary trading?
In binary options trading you don’t have to actually buy assets such as stocks, commodities and such. Binary options trading isn’t stock trading. As explained above, in this online trading type you will be predicting the movement of certain assets during certain time frames.
The below example shows you how binary options work:
– The stock prices of Microsoft will reach $500 by 20:00 today.
The above-mentioned proposition is what a basic binary options proposition looks like. You, as a trader, will have the task of investing either on the outcome that the above-mentioned statement will come true or that it will not come true. Investing on the outcome that the statement will come true is called ‘buy’ (or ‘call’) and investing on the outcome that the statement won’t come true is called ‘sell’ (or ‘put’).
How do you win in binary options?
The next obvious question is how do you win in binary options trading? The answer is through accurately predicting the outcome of a statement such as the one shown in the example above. Your winnings will be calculated based on a so-called payout rate.
Every binary options contract has a so-called payout rate. The payout rate will always be a percentage of the money traders invest in an online trading contract. The final payout that will be awarded on a successful trade will be the investment amount added to the investment amount multiplied by the payout rate.
To better understand this notion let’s imagine that the options contract that we have shown above, about Microsoft, promises a payout rate of 90%. This means that, in case of a successful trade, we’ll be rewarded with our bet amount plus 90% of our bet amount.
If our investment amount was $100 and we successfully predicted the option in the above example, then we will win a sum of $190 because the payout rate was 90%. If, however, we will not be able to predict the outcome of the contract’s proposition, we’ll lose the $100 invested.
Is Binary Options Trading Gambling?
Binary options trading is definitely not gambling if you don’t randomly buy contracts without thinking. If you pay attention to details and learn how to use binary options strategy then you’ll be able to influence your winning odds to your favor. (Source: FairBinaryOptions.com)
In gambling, games are designed with the intention of offering casinos an advantage. Every single gambling game is built in such a way as to offer casinos an advantage. Over the long-term, the odds will always be against you. However, this is completely different in trading of this kind.
As explained, in options trading you’ll be able to influence the odds in your favor. Predicting the movements of certain assets is is not massively difficult if you know what to look for and understand various binary options strategies. For example, it’s common knowledge that gold is an asset that almost constantly increases and very rarely drops (over the long term, that is).
As such, you’ll be able to generate a lot of money by buying one-touch options contracts that state that gold will lose its value during a certain time frame. However, while buying such contracts you’ll be investing against this statement because you know that gold is actually more likely to increase.
You have no idea what one-touch options are and how to bet against a contract? No problem, that’s why we’re here with our detailed strategy articles and educational material. It’s these things you’ll have to understand in order to have a chance at winning at binary options.
Can you Really Make Money Online With Binary Options?
The answer is yes; you can make money with options trading – but keep in mind that financial trading always comes with risks and nothing is guaranteed. However, in order to become a winning trader you will have to learn a few fundamental rules and strategies first. If you just register at brokers and buy contracts at random then, of course, you won’t generate consistent profits.
This is why we’ve created this Education section of our website. Additional articles in this section can be found on the mid-side menu of this page. The articles in our Strategy section complement these educational articles. If you read and pay attention to all of these then you’ll be able to increase your winning chances in binary options.
However, there are also many traders who believe that binary trading is based on luck. In reality, options trading is not based on luck at all. It’s all about skill and knowledge. The existence of these losing traders, however, makes it possible for financial service providers to stay in business. If everyone won, the broker would make no money. (Source: BabyPips)
Do you want to remain someone who just trades for fun, or do you want to become a winner, like many other professional traders?
How hard is it to learn trading binary options?
If you’ve read the paragraphs above then you already know how to trade binary options online. It’s really this simple; however, this is not enough to become a winner. Now you just have to take the next step and learn how to win at binary options.
Learning to win is not exaggeratedly difficult. Many people believe that you have to be an expert economist in order to learn how to win. The truth is, however, very different. Learning to win is not super complicated, it just requires you to be a bit patient and pay attention to details.
The first thing you’ll have to do in order to learn to win is to go though our online trading education articles. These will teach you everything about every feature that’s available in options trading. After this, you should go through our strategy articles that reveal real life tips and strategies you can use in order to increase your chances of winning.
How long does it take to see profits coming in?
It really depends on you. You can go through all of our strategy articles in a single evening. After this, it’s all about dedication and patience. If you’ve read everything we’ve taught you on our website, you should practice your new skills by trading on a demo account.
Trading on a demo account will place you in a real-time live trading environment. The only difference will be that you’ll trade with virtual money only. This way you’ll be able to experience and try out the strategies we teach you in our articles. After you’ve mastered all these strategies and exercised them for free on a demo platform, you’ll be ready to make a real money deposit.
So, basically, it’s completely free to learn how to trade and win at binary options. You should only invest real money when you’ve read about all the strategies and winning tips that exist and after you’ve experienced real trading yourself in advance without any investment at all.
So what are you waiting for? Begin to learn how to trade binary options now in order to be able to become a winner as soon as possible.