Trading binary options means trading options on stocks or other values, such as Forex, without owning the shares or other values that underlie an option. Binary options can be used to express their thinking on the stock market, but as a replacement for giving orders for the purchase or sale, you use options called call and put. If you think that some stock will grow on the market, then use call option. And about an option called put, that is when you are viewing some stock, and you think that it will decline at the market. The cost you give for the purchase of these options is also known as Premium. In binary options, the shareholder cannot be unable to find more cash than he paid for these options. It means that no matter how much you invest you cannot lose some extra cash, unlike some other websites that are promising you something extraordinary and it turns out that they are just there for stealing your money. And to mention that here there is no risk of broker screwing you over because he is just following your instruction.
If you bought a Call option and the price starts to rise, or you purchased Put option, and the price starts to decrease your profit potential is unlimited. What's more, the price moves in the desired direction, the higher you will realize a profit option. However, this is not the case with binary options. When trading binary options are limited, and the profit and loss and the sum are known from the start. There are various types of binary option. The best known and most commonly used are up / down options and binary one touch options. It's simple to explain if you use them then you gamble on which the value will go high or low, whether will increase or decrease. If you use up option it means that you thought that the stock will grow, and if you were correct that would give you profit, and if you wanted to use down option it's the other way around, or you thought that the stock will decline. If you are wrong, you don't lose all the money, one part of the sum stays at your account, and that sum can be known as premium.
When you trade with one touch binary options, it isn't essential that the value is over or under your opening value at the moment of expiration; it is simply required that the value gets to your predicted price. Let's say that the current price is 1.2500, and you purchase this option for 1.2550. Timeout is in an hour. Within the hour, the price has to increase and get to the height of 1.2550. If the value gets to the 1.2550 inside 10 minutes, you should achieve profits and it is not important what will happen in remaining time. Sometimes these options can be tougher than one touch options because the termination value may surpass the predicted price and return.
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