Oakland Gardens, NY -- (SBWIRE) -- 01/03/2014 -- The 'all or nothing' binary option is a fairly recent financial instrument that let a person earn a profit by correctly forecasting the price movement of a finical asset. A correct prediction earns a fixed payout of 65-90% on your investment. Contracts are typically short term, with many only lasting a matter of minutes or hours.
What Is Binary Options Trading?
While there are no shortcuts to success, trading with binary options offers a real opportunity to make money. They are easy to get started with even if a person has no prior investment experience.
There are many reasons why a trader would chose to trade with binary options. These online digital contracts provide many unique advantages when compared to many traditional trading methods, such as investment through a Forex broker or via a Stock dealer.
The key benefit to trading with binary options is of course that it is simple. The concept behind the ‘all or nothing’ contract is easy to get to grips with even for new traders. What is more, there are few barriers to entry. Newbie’s with little or no prior trading experience can quickly get themselves up and running.
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Below are some of the key advantages that this method of financial trading offers.
Simple and Understandable
The whole concept behind the digital options contract is simple to understand. Essentially a person only has to forecast as to whether he think the price of an asset will rise or fall over the contracts lifespan. If at the point of expiry he has made a correct prediction then he wins. Simple.
The ‘binary’ nature of the contracts means there can only ever be two outcomes at the point of expiry. These are referred to as ending ‘in the money’ or ‘out of the money’. This makes for easily understandable trading. A person doesn’t need to work out how far the asset price will move; only whether it will end up or down.
The return that a person is offered by a broker for a contract is fixed. A typical binary contract wills payout around 70-90% for a successful expiry. A person earns this return on his investment provided that the contract ends ‘in the money.’
As well as offering a fixed return, a further key benefit comes in the form of fixed risk. The liability on each contract is limited to the contract’s initial value. This is the case no matter how far the price of an asset moves against a person.
Furthermore many brokers also offer ‘Rebates’. These are a percentage payback of user’s original contract value. They are paid if user contract ends up ‘out of the money’. They range from 0-20% and can help to provide a useful cushion, particular for new traders finding their feet.
Low Barrier to Entry
Unlike many forms of trading users don’t need a large deposit to open a trading account. Users can open an account for just a few hundred dollars and trade small amounts of $10-20 on each contract.
Contacts are made directly between a person and the broker so there are no fees associated with trading. Whether a person trades a $10 or $1000 contract on the outcome, he is still entitled to receive the same fixed percentage return on his contract for an ‘in the money’ expiry.
Access Global Assets
A person can access a range of financial markets from a binary options account. The binary trader can move between markets and diversify trading strategies to seize upon opportunities as they arise on different asset classes. This results in the potential for a lot of opportunities which can be taken on the account.
The most commonly traded assets are the major market Indices such as the Dow, NASDAQ and FTSE, Forex, commodities and Stocks. The trading conditions remain consistent across all assets with the same high profits offered no matter what asset is traded.
Easy To Get Started
Opening account is easy. A person won’t have to complete a lot of paperwork. All you need to be supply a few details to get his account up and running.
Once his account is live he can then credit it in a wide variety of methods including by Debit/Credit card or through the use of a third party payment processor such as Skill (Money bookers) or PayPal. A person is then ready to start trading as soon as his funds have cleared.
Bonus Guide is the world's leading source of binary options broker information catering to all traders from beginners to full time professionals. The website was started by a professional trader and provides accurate and up to date information on the binary options industry and platforms.
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