Basics of Binary Option.
Binary options can described in different ways. On currency markets or on market interest rates, their name is digital options. On the American Stock Exchange, their name is Fixed Return Options (FROst) or "all-or-nothing" options. They called by binary, because they offer only two results: something (for example, profit of $100) or nothing. As usual, next assets can be used for day binary trade options:
There are many types of binary options, but there are only two main basic kinds, which are used by day traders:
Cash or Nothing: this binary option will pay beforehand a concrete amount of money, if the option is won upon expiry.
Asset or Nothing: here you are paid the price of the underlying security.
That's why these options are called binary options. There are only two available results of investments like this.
The idea of being able to trade binary options is very simple. You only need the desire of a trader to open a trading position, and afterward, close it during the same trading day.
Take notice of the fact that all contracts binary options have an expiration date and time. It means, that the basic contract for binary options has a fixed expiration date and time, if the trader's platform has the function of the option expiry.
For day traders, it's very important to choose a broker of binary options and expiration date of contract, with stop trade in limits in same the trading day. When a deal became active, from the preassigned date until the end of term, a trader can't manually close the position, which is possible with another type of trade options.
Feasible profit already has already been counted when you buy contract binary option, and traders already know this profit before the end of deal. Binary options can be realized like this almost with any financial product.
Besides the opportunity for high profit, which binary options offer to traders, they have some other advantages:
Traders can establish expiration time in compliance with different strategies (for example, more that 100 strategies).
Traders can make different operations with their accounts without brokers. There is not a middleman, which means there is more low spending.
Traders can trade by different options in the same time.
Traders can make little first investments,giving by this available form of trade day with risk limited. Traders can close all losses that are made before by one successful trade. Traders have non-stop opportunity to get their profit during the day. There is not downtime.
Some traders accept trade binary options like interesting game. The potential opportunity to win very high, and the turnaround can be very fast. Trader have always new opportunities to take advantage of these benefits with the help of non-stop development of the market of binary options.
There is high level of inherent safety, because of itself participation in trade of this market.
Now variability of market is not problem, because of clear risks and short terms in day trade binary options. Smart day traders follow tendencies and logic of markets. That's why they can make more profit without necessarily correcting all their strategies. Nevertheless, if tendency doesn't work because of a short time trade, there is always opportunity to exit and any losses can be minimum.
For trading binary options you can use Forex brokers. There are several popular ones like: Plus500, EXNESS, FxPro, and others.