Binary options are a type of financial negotiation that offers a simple way to take advantage of prices on the world markets. Unlike traditional negotiations, where you buy or sell an asset, with binary options, you simply predict whether the price of an asset will increase or drop over a certain period of time.
The “binary” name comes from the fact that there are only two possible results: you win or lose. It is a proposal yes or no-will the asset be above or below a certain price at a specific time? Forex trading site
How binary options work
When you exchange a binary option, you choose:
- An asset (such as a stock, a pair of currencies, products or index)
- A management (whether the price will increase or decrease)
- An hour of expiration (from 60 seconds to several hours or even days)
If your prediction is correct at the expiration, you get a fixed return, generally between 70% and 90% of your investment. If you are wrong, you lose the amount you have invested in this job.
For example, if you think that the price of gold will be higher at the next time, you can place an “call” option. If the price is indeed higher at the expiration, you make a profit.
Types of binary options
Binary options are available in several formats, each designed to adapt to different market conditions and trading strategies. Understanding the functioning of each type can help you make smarter decisions and effectively manage your risks.
1. High / low options (call / put)
This is the most common and simplest binary option type. You plan if the price of an asset will be higher (call) or lower (put) than the current price at the time of expiration.
Example: you place a call option on EUR / USD, waiting for the price to increase at the following time. If the expiration price is higher than the initial price, you receive a fixed yield. Otherwise, you lose your investment.
This type is ideal for beginners because of its simplicity, but it always requires an analysis and a strategy.
2. One touch options
In this type of option, the price of the assets should not reach (or “touch”) a specific target level once before expiration time. He doesn’t need to stay at this level.
Example: you predict that the price of oil will reach $ 90 a barrel in next week. If it affects this level even for a moment, you make a profit.
These options generally offer higher yields but are more risky, because reaching the target price can be difficult in uncertain markets.
3. No contact options
This is the opposite of contact options (https://bubinga.com/ja/ record). You win if the price of the asset does not affect the predetermined price level during the life of the option.
Example: if you think that the price of gold will remain less than $ 2,000 for the next two days, you can place a contactless option at this level. If it never reaches $ 2,000, you receive a payment.
No contact option is useful in stable and low volatility market conditions.
4. Beach options (limit)
With the beach options, you predict whether the price of the assets will remain in a defined beach (in the range) or the rupture outside this beach (out of reach) for the duration of the option.
In the range: you take advantage of if the price remains between two levels fixed.
Outside the range: you take advantage of if the price exceeds the upper limit or below the lower limit.
This type is useful when you expect the market to remain stable or experiences an important movement.
5. 60 seconds options (turbo)
These are short -term binary options that generally expire within 30 seconds to 5 minutes. You make rapid predictions on very short price movements.
Example: you expect the price of a pair of currencies to increase in the next minute. You place a 60 -second purchase option. If the price increases when it expires, you earn a yield.
These options are fast and exciting, but have a high risk due to their speed and volatility.
6.
The scale options offer several price levels (or “steps”) that the asset could reach. Each level offers a different potential payment depending on the probability that it is reached.
Example: If Apple Stock is traded at $ 150, a scale can have price targets at $ 152, $ 155 and $ 160. The higher the price level, the higher the payment – but the higher the risk.
The scale options allow traders to take advantage even if the market moves moderately, and they reward more precise forecasts with better yields.
Benefits of binary options
- Simplicity – easy to understand, especially for beginners.
- Limited risk – You always know how much you can win or lose.
- Rapid returns – Some options expire in a few minutes, allowing quick results.
- Accessibility – Many platforms allow you to start negotiating with a small sum of money.
Risks and warnings
Despite simplicity, binary options are high -risk investments. Many unregulated brokers operate in this space and can engage in practices contrary to ethics. Always choose regulated and reliable platforms to make sure your money is safe.
In addition, due to the fixed nature of victories / losses, the chances are not always in favor of the merchant. Losses can accumulate quickly if you do not have a solid strategy or risk management plan.
Conclusion
Binary options can be an exciting way to engage in the financial markets, to offer fast results and a clear structure. However, they need discipline, knowledge and prudence. Educate yourself, practice with demonstration accounts and always exchange responsible.
