If you have already traded binary options or are simply doing research to see if you want to trade options online then this article might help you answer some of the basic questions you may have. I am going to focus on binary options in this article because l like them the best but you can form your own opinion. I will also be recommending options platforms and how to find the right one for you. It is my hope that the information I provide here will aid you in your quest for successful investing and make life a little easier for you.
A binary option is an option that pays nothing at all or a fixed amount or a particular type of asset upon expiry of that option. A great advantage of binary options is that before you purchase it, you will know the potential return you will receive. The two main types of options that are binary are called all or nothing and they pay either nothing or a fixed amount of cash or an asset. There are exactly two things that can happen after you purchase a binary option that is why they are called binary.
Binary options can be bought for either direction of a trade and also on most financial products as well. An investor who thinks the stock will go up invests in a Call and if he/she thinks it will go down a Put is in order. There is a certain amount of time that an option has to get to the point that will pay you if you choose correctly and that is called an expiry. Binary options are not to be resold after purchased so the purchaser will have to wait till expiry to get results.
One example of a binary option trade would be if you bought a call option for a traded company's corporate stock to be at $40 with a payoff of $444 dollars at expiry. If the widget company stock is trading at or above $40 at expiry then the investor would receive $444. On the other hand if widget company stock is $399.99 or below at expiration then the investor loses the purchase price of the option. The basics of binary options trading are that you know the price you are paying for the option and that will be your total loss if you don't win the trade and if you win the trade you will know before you invest what that amount will be.
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To learn more about trading binary options check out http://bestoptionstotrade.com/ It is a great resource. I also like http://bestoptionstotrade.com/options-trade-discover-options-learn-trade/ I am sure you will like it too.
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