Trading with binary options is easy, and you do not need any previous experience. Below are some basic guidelines that we have compiled to help you start trading in a few minutes.
- To be a successful binary options trader, you need to use more than one broker. Choose one or more from our compiled list of brokers.
- Register with your chosen trading platform and deposit money to start trading. The minimum deposit for some trading platforms is only $ 100.
- Select the asset to trade. Trading platforms have assets such as currencies, indices, commodities, and stocks. You can choose to trade in currencies, the popular one being EUR/USD.
- Decide on the amount to invest. When investing in an asset, you will see the payout or the returns for the asset, which can go up to 91%. Make your prediction on the movement of the price of the asset. If you predict the price of the asset to rise, select Call (up). If your prediction is that the price will fall, select Put (Down).
- When the trading closes after the given time, for example after 60 seconds, if it is a 60 seconds investment and you have made the correct prediction, then you win. An investment of $ 100 with a 90% payout means that you will have made 90 dollars in a few minutes.
- Banc De Binary –a completely regulated platform that offers a wide range of trade options including forex, indices, stocks and commodities. This broker is also one of the brokers in Binary Option Robot.
- Boss Capital – this is an extraordinary binary options online platform for trading that serves as a liaison between clients and financial categories. It presents elite investment opportunities for investors which grants them access to worldwide markets.
- OptionFair – offers traders the ability to obtain safe and reliable profits by investing in various assets. This type trading is appropriate for beginner and experienced traders.
- 24option – this platform presents a wide range of option types that are a great fit for any level trader. Available returns for the aggressive trader with an enhanced knowledge of advanced trading tools such as rollover and sell option.
Binary trading options vary in type and there are several of them from which one can trade. The High-Low Call Put is recognized as a relatively simple option for trading. A prediction by the investor of if the price will rise or fall within a specified amount of time. Once this sets forth, the investor indicates call if the prediction is a rise and Put if a fall is predicted.
In this option, the investor predicts that the price of the asset will touch a specific value before the end of the given time.
It works the same way as the CALL/PUT option only that in this case, you select the price at which the asset must not reach before the selected period.
Example: Google’s share price is $540 and the trading platform is on the No Touch price of $570 with percentage returns of 77 %. If the price does not reach 570 dollars after the given time, then you have a gain.
The option comprises prediction of a rise (Call) or a fall (Put) in the value of the asset in 30 seconds.
It is also offered by some brokers and have the option of being bought back. This is a possibility for options that are termed in or out of the money but both represent major variables among brokers.
→ Boundary Options
These options offer boundaries of a lower and upper definition with a rate that can exist inside or outside of its boundary.
Binary options present a unique and easy method of trading price variables in multiple markets on a global spectrum. There are associated risks and it is important that the trader is aware of these risks, as well as the rewards.
References and Further Reading:1. High-frequency trading: a practical guide to algorithmic strategies and trading systems (Aldridge – 2013)
2. Foreign exchange option pricing: A practitioners guide (IJ Clark – 2011)
3. Currency derivatives: Pricing theory, exotic options, and hedging applications (DF DeRosa – 1998)
4. Systems and methods for providing an interactive trading application (L Amaitis, H Lutnick 2003)
5. Credit Default Swap Index Options (M Jakola – 2006)
6. Breaking barriers (P Carr, A Chou – Risk, 1997)
7. Trading VIX Derivatives: Trading and Hedging Strategies Using VIX Futures, Options, and Exchange Traded Notes (R Rhoads – 2011)
8. The Walk‐down to Beatable Analyst Forecasts: The Role of Equity Issuance and Insider Trading Incentives (S Richardson 2004)
9. Method and system of pricing exotic options (K Smith 2005)
10. System and method for calculating intra-period volatility (M Amberson, B Pierce 2002)
11. Commodity Option Pricing: A Practitioner’s Guide (IJ Clark 2014)
12. Trading the Fixed Income, Inflation and Credit Markets: A Relative Value Guide (NC Schofield – T Bowler – 2011)
13. Option listing and the stock-price response to earnings announcements (RR Mendenhall, DH Fehrs 1999)
14. The Forex Options Course: A Self-Study Guide to Trading Currency Options (A Cofnas – 2008)
15. Foreign exchange options: An international guide to currency options, trading and practice (A Hicks – 1998)
16. Method, system, and computer program product for trading interest rate swaps (WB Mosler, WP McCauley, JM Sherman 2001)
17. Derivatives: principles and practice (RK Sundaram, SR Das 2011)
18. A new method of pricing lookback options (P Buchen, O Konstandatos – Mathematical Finance, 2005)
19. Exotic Options: a Chooser Option and its Pricing (R Martinkute-Kauliene – Business, Management and Education, 2012)
20. The volatility surface: a practitioner’s guide (J Gatheral – 2011)