Simple guide to learn binary trading online
What are Binary Options?
Learn Binary Options because Binary Option Trading has become the most preferred way of trading as it gains popularity each and every day. Binary option was allowed in the market place in the year 2008. This type of trading is quite different from other common buying and selling of assets in the stock exchanges where by profit is made by the trader through rice of the price of a specific asset. In fact, the binary option traders do not buy their selected asset. They foretell its movement, either high or low upon a particular period of time. If the trader predicts rightly a profit will be seen but if it is a wrong one the trader will end up losing all his invested capital.
In binary option market, there are two types of involved members. These are, the dealers and the traders.
- The Dealers
To Learn Binary Options well, it is very important to know about the dealers. These are members who find both buyers and traders and engage them in trade. Their income is made by receiving commissions from both parties. Their job as brokers is to match buyers and sellers from the two sides of a trade agreement. No assets are exchanged in this particular market hence we cannot talk of buyers and sellers. Here, the trade that takes place involves agreements grounded primarily on the behavior and price of the assets that are being traded.
Traders are divided into two sides i.e. predicting either upwards or downward movement. Traders on the upward side are paid money by those on the downward side. This is because the upward side gains while those on the downward side lose money. There cannot be a case of misunderstandings with brokers or dealers paying out as most of the times there are less winners than losers.
Here is a list of types of binary options traded on the market.
- Contracts which are high/low
- 60 seconds where by prediction is fulfilled in just 60 seconds
- In and Out also described as tunnel trade
- High yield options
- Touch and No touch
Binary options markets are special since trades expire within a particular moment in time.
Types of assets
What makes Binary option trading mostly fit for non-professionals is that it can be accessed by a common man out there in the street. The stock exchanges around the globe are the participants in financial advisory. A retailer who possesses only the primary idea of the trades can find him/herself in a problem engaging in competition in this field. Since he has no professional background, he doesn’t have access to the necessities required on this market.
Generally, the kinds of assets traded by binary options involve,
- Stocks indices
- Currency pairs
There are other popular commodities involved in how to trade binary options. These include; gold, silver, grain and crude oil. These commodities are as important to the entire world as they are to the binary options trading.
Binary Option Payouts
The investors’ vital consideration is the money they are going to gain as a profit. The profits incurred from investments and the correct prediction is known as payouts.
How to Calculate Payouts
Most binary option dealers determine the percentage of profits made on a right prediction. The payout is the total money invested in addition to this percentage.
The rates of payout are different depending on contracts. But normally they are within the figures of 65% and 90%. The dealer can also, in a particular time, provide the trader with the option of a return of his general investment whenever a prediction fails. In this case, the percentage payout will be altered.
Run bets are relatively large when the trader becomes a winner. But this only takes place 2% of the entire period. A compute shows that at the end of it 98% of the involved traders end up losing all their money.