What is Binary Options?

 2019-11-15 08:39:12

What is an Option?

Before we get to know the binary options, we need to figure out what option is. An option as a financial derivative, first of all, is a contract.

Generally speaking, the contract stipulates that the buyer has the right to buy or sell the corresponding financial assets at the specified time or period at the price stipulated in the contract.

 

What is a Binary Option?

Binary options, like general options, are also a contract. But the trader’s rights in the contract are different from the general options. Traders do not have to buy or sell the underlying asset within the specified time frame, but only generate corresponding gains and losses based on the asset's expiration price and execution price. Binary Options is a simple and easy-to-understand financial product. It can invest in options with stocks, foreign exchange pairs, cryptos, gold and silver crude oil and other financial products.

The binary options profit method is only to judge the rise and fall, so it is called "binary". Instead of studying the specific price change data, we only need to predict the price of the target price purchased in a time interval. Therefore, binary options are considered by investors to be the simplest type of financial investment.

Binary options not only have advantages in trading operations, but also have the advantages of a short trading period, low risk, and low threshold. Binary options are still T+0 bilateral transactions, and bullish or bearish can be profitable, depending on the direction you buy. Theoretically, binary options can be traded 24 hours a day, 7 days a week. Binary options are not the same as ordinary options. They are simpler and easier to understand and are more suitable for ordinary small and medium investors.

Like the traditional bullish binary option, as long as the underlying price of the underlying asset is greater than the strike price, a certain percentage of the invested amount will be earned.

If the underlying price of the underlying asset is less than the strike price, a certain percentage or all of the invested amount is lost.

 

Binary Options Features:

1, Risk Controllable

Binary options provide a predefined structure of gains and losses. As a result, you can even know exactly the scale of potential profits and losses before signing a contract. In this way, you will be able to accurately assess the risk of each option.


2, Higher Potential Profit

Binary options offer you the opportunity to open larger trading positions with underlying assets, but with minimal cash investment. Besides, you only need to focus on determining the direction of the change without paying attention to the extent of the change.


3, Real-Time Revenue

With sophisticated and advanced web and mobile trading platforms, you can quickly respond to all new global and trading situations by opening new binary options quickly and accurately.


4, Simple Transaction

Your trading decision is simple because you only need to decide the direction of change in your underlying asset, either rising or falling. Therefore, you do not need to conduct extensive investigations or evaluate complex financial reports.


5, Fair Trading

One of the main advantages is the higher transparency. Due to the huge volume of transactions, the main force has limited influence on the exchange rate changes, and the binary options are short-term trading, that is, almost no manipulation Possible.