Because binary options are so simple to understand and to trade, they are quickly becoming among the most popular platforms in financial trading. Binary options are referred to by a large variety of names, including two-way options, barrier options, fixed-return options, digital options and all-or-nothing options, among many others. In addition, Investopedia, one of the world’s most respected trading information websites, defines binary options as:
“A type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes/no proposition…”
Trading options therefore offers you the unique opportunity to earn instant gains depending on the type of asset and the flavor of binary option trading you use. With Banc De Binary, you simply need to correctly determine the price movement that a certain asset or market will take during a particular time period to earn a profit. However, if your prediction is wrong, you can still receive up to 10% of your original investment back as a return.
Types of Binary Options
In its simplest form, binary options trading is a pure “Call/Put” wager, also known as a “High/Low” trade. However, there are other binary options flavors as well, such as the so-called “Touch / No Touch” options which can be used by more advanced traders to take advantage of typical ranging and trending behaviors of the market prices of the various assets traded. In these advanced modes of binary trading, the trader gains a competitive edge by reading and analyzing indicators and charts before making a trading decision.
- What Is A Put Binary Option?
- A Put binary option is placed whenever you expect that the price of the asset or commodity you choose to wager on will be lower by the end of a particular trading period. If this happens, and the asset price does move lower, you win the trade and receive a predefined payout as a profit.
- What Is A Call Binary Option?
- If you choose to place a Call option, it is in the hope that when the trading period comes to a close, the price of the asset you will have chosen, will have risen higher than its starting price. If the price rises, you then earn a profit that is predetermined at the beginning of the trading period. In effect, this makes the Call option the opposite of the Put option.
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