Binary trading app review options are as the name states. They call on traders to make one of two decisions. They are to put or call options as in betting whether an investment will move up or down by the end of a contract. Puts and calls are ways of saying whether someone guesses that the investment moves up (call) or down (put).
That means it truly lives up to the name “binary” as the investment will take your money or pay you money. Say your friend is going to show you how they trade binary options on . They love stocks but are not good at buying the whole investment (the stocks) and winning considering all of the market volatility and the “insider information” that is not available to him.
He trades on the side and tells you he found a way to make money. He instead invests on the position of the stock, without having to cough up $600 per share for Google, plus another $20 per trade to buy and then another $20 per share to sell. He’s lost money having to hold stocks when they are losing. So, instead, he might toss $50 on the bet and might make $100 if he wins with a short-term, end-of-day contract.
If he guesses the closing price wrong, his broker returns 15% of his money. So, instead of losing $50, he ends up still holding onto $7.50. If he guesses correctly, he makes $100, and tosses a percentage to the broker (not $40 either). Not bad for a small investment and lower risk.
How Does Binary Options Trading Differ From Gambling?
While a blind trade is gambling, you never want to leave your money up to chance. Sure, with a slot machine, you insert money and pull the arm/push the button. The machine is programmed to not pay out most of the time. The odds are stacked against you.
Now, in the markets, trading successfully is all about learning and assessing research, historical information, the underlying asset, market information, and current events. It works much better than a prayer and a lucky rabbit’s foot in your pocket at a casino.
The hard part, especially for new traders, is to remain calm and avoid making knee-jerk trades. Those almost always fail because they are based on an impulse to toss money on the betting table, not on research and analyses. The same is true for those who mimic other traders. Do not follow whatever she or he is doing because you have no idea whether they are acting impulsively either.
Instead, let’s say you are into investing in binary options for stocks. Just because the market itself is seeing high volume and looking bullish does not mean that Stock A and Stock B will both turn out to be winners the end of the trading day. Maybe mining stocks are taking a huge hit because there was some abysmal disaster that is impacting earnings for all of those stocks. Yet, technology is driving the run-up of the markets, which takes with it a lot of other stocks.
Also, find solid, trustworthy and educational registered and legal brokers. Binary options are traded online and that’s why they are accessible to the masses. Many will provide a library of information for new traders to learn the ropes. They may even give access to a fully free demo trading account. Test out new strategies and tactics in there, without risking any real money. Even more, will provide the incentive to newcomers by dropping some money in their accounts. Here is the basic information traders need to become minimally trained to make trades.
The expiration or expiry time refers to when the put or call option expires.
The strike price is the asset’s value prior to its expiry.
The present market price refers to the value of the currency pair, stock index, stock or commodity at the present moment. Call and Put are important because a trader has to decide their position — whether to place a call option or to buy a put option. This is all about which way the trader is guessing.
The payoff refers to the money necessary to participate in a digital option.
Learn the terms, and make sure you know them reflexively, like the back of your hand. You do not want to have to stop and review definitions of the most important terms when you have to make a decision on a short-term contract. Use this as a starting off point to opening your trading account.