What are Binary Options?

A quick summary of Binary Options.

Binary Options are a form trading, across a variety of different options that involves an all or nothing outcome to winning. The name Binary Options comes from the fact in the sense that Binary is made up of 1’s and 0’s, Binary Options trading has two possible outcomes, Win or Lose.

To Win or Lose in Binary Options, it’s necessary to predict the price movement of preferred assets over a set time. This set time is called the ‘expiration period’ and can be as little as 60 seconds, or as long as 60 minute depending on the broker of choice.  Within this time period the chosen asset will rise and fall but it is the final position of the asset at the end of the expiration period that matters in Binary Options trading and decides whether you Win or Lose.

When placing a Binary Options Trade you must decide whether you think the chosen asset will finish above or below the chosen price and in line with this place a CALL or PUT trade. If you place a CALL, you think the chosen asset will finish above the chosen price at the expiration time and if you think it will finish below the chosen price then you chose a PUT trade.

When the expiration time is reached, If your chosen trade was correct you will be ‘In the money’ and receive a payout usually a set % that you will be aware of before placing the trade. Most brokers will have this % displayed next to the assets that you are trading so you will be able to work out how much you’re set to profit in the event you finish ‘In the Money’ If however, your chosen trade is wrong, you will finish ‘Out of the Money’ and you will lose your initial deposit you put on the trade. This is where the all or nothing aspect of Binary Options trading comes into play.

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