More and more traders around the globe turn to binary options. It is no surprise because they allow traders to reduce exposure while being able to maximize their profits. Most experts say that they are more profitable than currency pairs. Is it really so? Can traders and investors trust binary options as reliable tools for making stable profits?
According to , binary options have been used heavily since 2008 when they were introduced to the Chicago Board Options Exchange (CBOE). Until then, only corporate investors and major banks could trade them.
Binary options are usually referred to as “all or nothing’ assets because traders can either double up or make no profit at all. Nevertheless, binary options have several advantages over their counterparts:
· The trader knows the potential risks and rewards when making a certain deal.
· Trading binary options is relatively easy. No extraordinary knowledge or skills are needed.
· Price is the only indicator used when trading binary options.
· Binary options are the least risky assets to trade.
By the way, an option is called binary because it consists of 2 components: One is used to transfer the profit to while the other remains “empty”.
According to , there are 4 kinds of binary options:
· call (or above)
· range
· put (or below)
· one touch
What binary options are used more frequently?
According to OptionBit, which specializes in binary option trading, most traders prefer call or put options.
In trading platforms (like the one offered by OptionBit), they are marked by upward and downward arrows.
These assets inform about the income ratio. When trading binary options, profits are fairly considerable – 70% and more. At the same time, the minimal period of the trade is 15 minutes.
There are many professional traders who prefer to trade range options. More specifically, you can trade binary options price and time. For example, you decide to buy EURUSD at 1.1000. You specify the range from 1.0900 to 1.1100. By concluding a deal you specify your profit and your ITM range. If on expiration the price is, say, 1.1045, you are in the money and get +70% or more. If the price is out of the rang, you get nothing. The wider the range is, the greater the potential profit will be. However, in this case, the potential risk will also be greater. You want to reduce exposure, narrow the range prior to making a trade.
One-tough options imply that the price will reach a certain level until expiration. If this is the case, you profit.
What are the advantages of binary options?
· More often than not, the trades are short-term 15 minutes and more. However, there are options trades that can last up to a month.
· Binary options are more affordable in terms of cost and risk management.
· You don’t need substantial amounts of money to start trading binary options.
· You don’t need indicators to trade options. Price is the only indicator used.
The only thing you need to do regularly is to monitor the news that can influence a certain underlying asset (if you trade options on wheat, look for weather forecasts, harvesting data etc.).
Beginners are recommended to make forecasts for a day or more as binary options for such time periods are easier to trade. As you get more experienced, you can switch to smaller timeframes.
Who offers the best conditions for binary option trading?
As we can see, binary options have lots of advantages for beginners and professional traders. At this point, the industry is full of brokers offering you an opportunity to trade binary options. But most of them do not specialize in binary options and therefore cannot provide high-quality service.
Luckily, there is a broker specializing in binary options. It’s name is OptionBit. The company’s focus is to provide comfortable and secure conditions for binary option traders.
With OptionBit, you can trade binary options on currencies, stock indexes, shares, commodities.
At this point, OptionBit offers 3 ways of trading binary options: Digital, Touch and Range.
Each of them has its own benefits for traders with various trading styles and approaches.
Digital is suitable for those who like forecasting the direction of the trend at the end of a certain period.
The peculiarity of this type is that traders can “Close Now” or “Extend” the option depending on the current market situation. Therefore, traders can secure their trades against unpredictable market behavior.
Touch Trading is for those who can predict whether the price will “touch” a certain level over a certain period. If this is the case, the trader profits 75% to 81%.
Range is suitable for those who can predict whether the price will stay in the range over e certain time period.
If you’ve become interested in binary options, please visit OptionBit’s official website to get more information.
