Binary Options made Easy

Posted: 23rd September 2016 09:22

Many of us look to the internet in order to make some extra cash, some take on surveys or write reviews on different goods and services whilst others chance their luck at online gambling sites like where you can also catch up with friends and have a laugh in your spare time whilst enjoying your favourite game.  Remember too that you can also use the free bonus money and promotional offers to fund your games so any money that you win will be with the compliments of the site and not your own bank.

On this page we are going to focus on the basics of binary trading which is quickly becoming one of the most popular way to earn some extra money via the internet, and the explanation will be user friendly and not full of jargon, so hopefully if you are new to this experience the information will help.

Firstly you need to know the way a binary option actually works, and this is from your perspective who is known as the trader.  What you do is choose whether or not a certain asset like a currency or a commodity is going to go up or down in value over a specific time.  When you have made your choice you then essentially bet some of your money on your prediction, it is that simple.

It is usual for you to be shown how much money you are apt to earn if your choice is correct which is your money placed on your prediction plus a return which is usually between 70-85%.  If your choice turns out to be incorrect you will lose you bet and any monies that you risked.

Every single binary option contract include three main factors that you need to be aware of and these are the expiry time, the strike price, and last but not least the pay-out offers.  The expiry time is the length of time from the moment you place your bet or buy the option contract until it closes and can be as little as 60 seconds to weeks, with most traders (you) taking the shorter term binary options more than the longer term ones.

The strike price is simply the price that you bought into the contract and this is the price that actually determines whether you win or lose for you have to close at a higher price than you bought in at to win.

Finally the pay-out offer is the return you are being offered if you win so it could be 80% for a win but 0% for a loss (there are some options that do pay-out for a loss.)  You will be able to see the pay-out offer before you actually risk any of your money.

You can usually trade as little as $10 and your risk is obviously limited to that trade amount, the more you bet on an outcome the bigger the wins and of course the greater the losses.

It is always a clever move never to invest more money that you can comfortably afford to lose as there is risk involved, and remember you never take any ownership of whichever asset you are predicting an outcome on, you are only betting on the direction of the price, its worth in the market.

There are many different types of binary trades on offer but beginning with Up or Down (in value) is a wise idea, even though trading binary options has been designed to be a simple process. 

In conclusion, your risk is only linked directly to the amount you place or bet on the trade and you will know beforehand what the pay-out will be.  If you win on a binary options trade you will get a fixed, predetermined amount of winnings in cash, and since there are only two possibilities, either win or lose, that is where the origin of the name ‘binary options’ originated.