Fixed return options are binary options because only 2 possible results are available. This is a contract that gives the purchaser the right within a specified period to buy an underlying asset at a predicted fixed price. The safety traded is referred to as the underlying asset and may include goods (for example, gold, silver, nickel, lead, oils), currencies (USD / JPY), stocks (for example, Apple, Microsoft, IBM) or inventories. The price the owner buys or sells at is referred to as the strike price.
The person purchasing the underlying asset selects a calling option when he trades binary options if at the expiration of the time which may be at the end of a day, week or month the amount of the security is expected to increase. The buyer will make a call with the idea that the option price at the time of trade is higher than the current price. In reverse, when the owner thinks that the option price is lower than the current price, he will place an option. The most flexible type of trade available for binary options trading. The trader can choose the asset, the intended direction, the expiry time and all of this can be checked by the security owner. The only thing unknown is whether the asset is less or higher than the current price.
The binary options trading and ordinary trading differ greatly. You actually own the asset under normal trading and can own it anytime you like. You actually deal with the variance of the asset under option trading. When, for instance, you do business with Microsoft, you actually do not own the company’s shares, but enter into a contract to determine whether the price of Microsoft shares will be increased or decreased at the end of the expiry. After studying the price movement for security, the correctness to which you can predict can help to profit or lose the trader.
Trading of binary options is a common tool nowadays used by traders. Most traders in the day are now adopting binary options to increase their profits. Binary options trading is simply a contract that gives the trader a predetermined fixed amount upon fulfillment of a given condition. The amount that is paid is dependent on whether his contract ends in “in the money” or ends in “out of money” If a contract ends with’ out of money,’ at the time of expiration the trader won’t receive anything. Would you like to double your profits without investing more? The binary option is the tool to secure maximum profit. If you can foresee the price movements of an company’s safety for a certain period, the field where you can surely succeed is option trading. Trading binary options carries a high risk with it. But is there a fully risk-free trading instrument? The returns you get are much more than the returns that you will receive from any other trading instrument if you can bear the risk associated with options trading.
How can we use binary money-building options?
1. Trade in the most active and liquid securities. Traders should always trade in companies that are very active on the indices and do greater trading volumes every day. These are highly capitalized growth-oriented companies and their prices can always be expected to increase.
2. If the market has already risen, don’t you feel sad in one day when you miss out on the rally caused by a certain sector of a company. You can trade the other way round as at the end of the day the prices have to set.
3. Take importance for quantity rather than quality: When using binary trading options, the most important thing to consider is to consider quantity over securities quality. When you trad stock quantity, binary options will provide more returns than their quality. Traders don’t have to worry about the scale, but only consider the safety price direction.
4. Trading binary options can be used to cover up: The easiest way to make money from trading binary options is to secure your contract. If you find the price movement in your favor before the end of the term, you can hedge the contract and lock the profits that have already been made. In conclusion, we can certainly say that the trading of binary options is one of our most powerful trading instruments that can help maximize traders ‘ returns.