Friday, November 22, 2019

Who needs Binary Trading

Binary option trading is such a recent invention in the markets, that many traders do not realize just how they could use it to good effect. In case you don’t know, binary options get their name because the result is “binary”, simply yes or no. The option is either above or below the price of a financial security at the expiration date and time, and you either get paid or you don’t.

If you have a binary call option and the price at expiration is more than your strike price, then you profit by a set amount, usually $100 or $1000 depending on the market and your initial investment. If the price is less, you get nothing, unless you trade with, in which case you are still left with 5%. You can also buy a binary put option, which works in the opposite way.

Because they are so simple, requiring only a sense of direction of the price, they are easy to trade and the risk/reward ratio is predetermined when you buy the contract. Thus traders are turning to binary options to simplify their choices while giving them the chance of good profits.

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