A binary option is actually easy to understand. An options broker will offer you a variety of assets. After looking at these, you may choose one to buy. You may then buy a contract, which may last as short as a few minutes to as long as an entire day. Your goal now is to guess the movement of the market and see if the asset you chose will increase in value or not. The only time you get the amount specified in your contract is if you correctly estimate the outcome. If you fail to make the right call, you stand to lose 85-100% of the investment.
The expiration time comes and you’re in luck. Your profit is $1,000 less the $400 cost of the binary options trading, ie. $600. You risked $400 and made $600 which is 150 percent return on investment. Well done!
Fores binary options trade pays out a 60 to 81 percent and a percentage return loss will sum up to 15 percent of one’s investment. This is not bad for an investor because there is still a return in profits.
Buying a Forex BOs contract can cost you something between $5-$40. If you bet on the direction of the market correctly, you make $100 per contract. If you had betted on the wrong direction, you lose your investment on buying these BOs contracts. Like any other form of trading, there is risk involved while trading these contracts. How do you overcome this risk? By developing a system that minimizes risk and maximizes the profit.
The http://thepayoffprinciple.com method has truly revolutionized the trading industry. With this method, you need not invest high amounts of money. You don’t have to spend a lot of time strategizing your trading techniques. The concepts are pretty simple and you can start trading without much deliberation. There is no need of studying and analyzing complicated charts and reports that might cause more confusion.
This is how trading binary options would work: Investor A invests $100 on a call option on Oil, with a 70% return rate, with an end of the day expiry time. The current rate of Oil is 65.9001. If at the end of the day the price of oil closes at 65.9002 or above, then Investor A will receive $170. If it closes at 65.9000 or below, then he will receive a $15 payback. The simplicity of binary option trading makes it an attractive and desired way of investing for many investors.
As soon as one understands clearly how you can do this, the reservations and misgivings fade and tend to diminish and disappear. Good information will clarify things. Why don’t we consider and examine 3 reasons in favor of why you possibly ought to trade using binary bets / binary options.
Considering all the above advantages, it is no wonder why more and more amateur and professional traders alike start trading binary options and make a steady income out of it.