Binary options are derivatives that you can trade and profit online. Their value depends in fact on the value of other financial instruments, which can be shares, indices, currency pairs, and commodities in the case of binary options.
Online business takes place via trading platforms, i.e. software that lets you select the preferred asset (e.g. some monetary pair), choose a date of expiry (e.g., 5 minutes) and place a purchase order.
If you purchase a binary option from a inventory, it doesn’t imply you buy an stock and become part of a business. The purchase of a binary option on a stock is to predict the up or down stance, based on opening the stance, of the inventory price at expiry.
For instance, if I think the GOOGLE stock will have a higher value in 5 minutes than the current one, I will buy a CALL option. If the inventory had effectively increased by maturity in comparison to the buy price, the transaction would have been effective and we would therefore have made a profit. It’s said that you end up “in the cash.”
If, on the other side, I believe the inventory of GOOGLE will have a reduced stock value in 5 minutes, I will purchase a binary option PUT (also called LOW). In the case that the inventory actually declines in comparison with the buying price at the end of the 5 minutes, the transaction will be effective and we will be “in the cash.”
Obviously, when we make a mistake, we will end up’ out of the cash’ and lose the quantity invested in the single transaction, i.e. the buy cost of the binary option Types of Binary options As we saw you can make money online with binary options, and you can do it through atraded software. You can also continue in various ways to gain profit. Although we talked in the introduction about CALL and PUT options, it should be observed that these are only the “classic” kinds of binary options. Types include CALL and PUT binary alternatives: if the value of an asset increases or decreases on its expired RANGE or INTERVAL binary options, the investor must imagine that the value of an asset at a certain maturity is within a range of values (Minimum and Max) TOUCH / NO TOUCH binary options, the trader should predict whether the value of the asset will increase or decrease: At present, only 24 alternatives are provided for this sort of alternatives.