When you begin learning about binary options you need to start from one solid place: preparation. All of the experts will agree that you cannot leap into binary options trading unprepared for the pacing, decision-making, and need for details. Though you can start small and gain efficiency over time, you never want to start poorly informed.
Because of that, we would recommend that you begin using binary options in a way that is low risk and easy to choose. Known as high/low or call/put options, they allow you to make an investment based on one thing: whether the markets will go up or down. While some brokers cover broad investments, such as indices options, you can also choose specific assets, such as stocks or commodities.
If you are involved in investing, it is quite likely that you have been monitoring specific areas and/or assets. Perhaps you have stocks in Apple , Facebook , and others. You might have some commodities such as gold and silver. And you could have some Forex holdings among other assets.
Because of this, you remain aware of changes in these assets’ values and can make well-informed decisions about when to sell or buy. This sort of knowledge can also be used to help you make a safe entry into the world of binary options trading.
Binary Options Await
As an example of this, let’s say that you have holdings in gold. You watch the market prices and you opt to buy when prices are at their lowest – which also tends to be just before they begin to climb again. You know from analyzing data that the prices can fluctuate wildly, and so you also monitor world news events to know when you might benefit from any changes in the price.
Did you know that you can also use your knowledge of price increases to make a tidy profit as well? Through binary options, you can invest in the anticipated increase in prices. The way it works is simple, and binary call options “pay you a fixed return when the underlying asset ends up higher than the strike price upon expiration.”
For example, you buy $1K of binary call options on gold prices. The strike price is $1300, and the payout is 70% with a 100% risk. What this means is that your investment will pay you 70% of that $1K ($700) if gold goes above the strike price by the time your contract expires. If it doesn’t hit that amount, you lose the $1K that was invested.
Binary call options are available through binary options brokers, but not all assets are available. What’s more, they don’t all provide the same returns. Nevertheless, it’s possible to gain a tidy sum when you already have knowledge of upcoming trends in the markets or in your specific asset groups. While the return is fixed, you are still boosting the value of your portfolio using data that you did not have to specifically seek and assess. This, however, does not mean you should rush headlong into a binary call option because you heard that a specific asset or market was set to climb. First take the time to determine the right length for your binary call option contract and be sure your fixed return is the best possible, then go ahead and make the trade!