Basics of Binary Options: A Guest Post

The following is a guest post contributed by one of our readers.

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:

Currency
Stock indices
Assets
Goods (limited)

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.

Meet Laurel Hardy, Investment Advisor

Laurel Hardy started her career as an international fashion model, but turned her focus to finance. She worked as a broker for four years at a major wire house brokerage firm, where she learned from senior mentors with decades of Wall Street experience.

In founding her own wealth management firm, BespokenWealth.com, Laurel wanted to share accessible financial strategy that would otherwise only be available to the wealthy. She believes you can build wealth in this country with solid planning and investment strategy, regardless of your family's background.

1. What inspired you to take up a career in finance?

I never liked finance in school. It just wasn't something that interested me. I liked sciences and earned my degree in Ecology and Evolutionary Biology. Towards the end of my education, though, I realized that every scientist needed to find funding for their experiments. That meant seeking grant money or money from individual investors. There happened to be a lot of politics involved in that process, and often times the best experiments were blocked from being conducted due to lack of funding, not lack of importance. I wanted to make a difference in science by funding experiments that were not funded elsewhere. To do so, I set out to see how money worked.

I looked for an internship at an investment firm, but ended up with an opportunity to work alongside my father as long as I passed my licensing tests. I passed my series 7 and series 66 on my first try, and was sent for further training in St. Louis. By the time I was done, I realized how important money and savings are to every single household out there. I saw that there was a massive need for trustworthy, knowledgeable, and sound individuals to provide advice on investments.

Unfortunately, most individuals don't realize that they aren't getting good financial advice, but are either being sold a product or are being short-changed. 401(k) providers at work usually do little or nothing to educate people on how to invest. They don't want the liability, so they tell people to pick for themselves. They just give them a bunch of choices and say, "You pick." People often chose randomly because they're so overwhelmed. Others go online and think they're getting good advice. They don't realize the biases involved and the products being sold to them through the advice they're reading. Even accountants fall victim to savvy investment salesmen who convince them that selling investments is something anyone can do to get them to sell their mutual funds. It's disgusting, and I could see that I could really make a difference for individuals by giving sound advice and knowing what was going on out there and who was pushing what. It's too much information for the hobby investor or average person to expect to understand since they have to spend their time working. My work is this, and that's why a good investment advisor is so important for individuals to have.

2. Why did you decide to start your own personal investment firm?

I was frustrated by how expensive the large firms were for my clients. There has been a push towards banking and away from investing as well. Banking is different from investing in that it involves loans, lines of credit, and checking accounts. Investments are a completely different specialty. I did not think it was in my clients' best interests to be sold mortgages and lines of credit when they were just trying to allocate their 401(K). I left the firm and worked briefly with another individual who ran her own firm from her house. I then started mine.

Unfortunately, most independent advisors do not have much education in investing. They usually have accounting knowledge, then sell investments on the side. To give people good investment advice without having to sell the products a large firm wanted me to push and without having to charge people an arm and a leg, I needed to start my own firm.

3. How do you customize your wealth-building strategies to meet the individual needs of your clients?

I listen to my clients. I mean really listen. People tell me what they're concerned about, what they're feeling, and what they want to do with their money. Then, I do my work to find the type of account, type of investment, and type of platform on which they can hold their investment before making a recommendation on all of these. Some people prefer to do their own investing and just want someone to bounce ideas off of for now. Others need a whole financial plan and want a trusted advisor to handle their accounts so that they don't have to. Either way, I choose each investment and product with my clients, based on their needs and wants. I do not choose one way to do things and then make all of my clients invest that way. That's why I'm different, but that's also what makes my way of doing things efficient. It takes skill, knowledge, experience, and an ability to understand what individuals are experiencing to be able to run my investment firm the way that I do. I know that I'm delivering the best quality advice a person can get because I'm not swayed by corporate interests or manipulated by mutual fund companies. My clients get my full attention, and that's why my firm is unique and personalized.

4. I think a lot of people feel that they can't afford to hire an investment adviser. What would you say to people who feel that way?

Can anybody afford NOT to hire one? The difference between 25 years of good investing and 25 years of guessing on your own is large. Either way, everybody will pay someone to manage their money. It's best that you make a judgement call about who you want to pay and how they'll manage it instead of just going with the flow and telling yourself you're saving money. Unless you are the one waving a ticket on the trading floor of a stock exchange, you are paying someone to invest. Even people using discount online trading that they do themselves are paying someone to invest for them. They just don't realize it, and that's part of the marketing that the trading platforms propagate. It's often hidden and complicated, but that's the truth. So if you think you can't afford to pay an investment advisor, you're wrong. You already are paying someone; you just might not be getting advice.

5. For people who are new to investing their money and working toward building wealth, what is your advice on getting started?

My advice is to save your money. Investing can be overwhelming, especially with so much bad information out there, but don't panic. Slow and steady wins the race. Friends and relatives may mean well, but they are often our worst enemies when it comes to the investment advice they give. If you're not comfortable investing your savings, you don't have to. When you're ready to invest, you'll know. Then, realize that slow and steady wins the race.

Finances are EXTREMELY personal to people. Every single person has a different speed at which they want to go. Unfortunately, everybody also thinks that they're a professional at finance and wants to tell you what to do with your money. It's difficult to stand your ground, but my advice is do your best to save as much as you can, then be true to your instincts about how to grow your money once you've saved it.

The worst thing a person can do is nothing. Time is the most important thing an investor has to work with, and the longer people wait before investing their savings, the less time they have. Doing nothing is actually hurting you, so get serious about saving some money for investing. It's the best way to take control of your future.

Thanks, Laurel!