Binary options are the newest doors having been opened for the little guy and placing him on equal footing with the rich and powerful, who control the markets with their large buys of shares, their speculations, their commodity trading and even with their hostile takeovers. So now with just a computer, some great digital software showing technical trends and a few hundred dollars, the little guy can now stay at home and lay by his little pool while doing some binary options trading and making nice sums of money to more than pay his bills. And why can he do that you ask? Well he can because Binary options are the simplest and newest investment vehicles where all you have to do is decide if a stock or commodity will be going up or down in the next 15 minutes or so, and you either win or lose by your educated speculations. Thus the term "Binary", meaning you have two choices: Yes or no, up or down, going higher or lower, and then exercise your option on that stock or commodity, or currency or index.
And so you must take advantage of this great opportunity to get into the markets, and start working your way up to a comfortable financial living, and eventually to becoming rich as you master more and more the art of trading, placing "Calls or Puts" with binary options. And if you have a laptop, a few hundred dollars, access to technical software and can stay abreast of the financial news, then you are on your way to being a player, a captain of the industry, a mover and a shaker.
So today we will look at some common terms used with binary options.
Binary option: (What are they?)
Binary options are special type of options where you know their loss or profit in advance. And this is what you want in investing, a for sure thing where you know where you stand from, win or lose. If your transaction finishes with a profit, you can make up to 85% of your original investment. If not, you lose your original investment.
By placing the Call order, you speculate that the price of an asset at the time of expiration will be higher than it is at the moment of purchase. And this is where you want to be, in the money.
By trading this option, you speculate whether the given stock or commodity will grow or drop. If your decision is correct and the value of the stock after the option's expiration is higher (or lower in case you were speculating on a drop) you will be credited with profit. And while you will not win or make a profit on every option, if you stick to the basic fundamentals, like never invest more than 5% of your capital per option, and spreading them through different investment vehicles, you will always end up on top profitably.
Expiration time is a period of expiration of an option in which the investor finds out whether he invested correctly and his investment was profitable. And usually that is about 15 minutes.
The way a trader examines how macroeconomic data affect the option price. And if you choose this route, this is where you start to master the technical charts, the things happening in a company, the way people view an underlying asset, and all outside events like mother nature that may affect how an asset is trading.
In the money:
In case your contract expires In the money, you have speculated correctly and you make a profit. And now imagine you keep winning every 15 minutes for a few hours, although you will lose at times.
Out the money:
In case your contract expires Out the money, you have speculated incorrectly and you make no profit. And with binary options, all you lose is that percentage of your capital that you just invested. Remember from above, you should not invest no more than 5% of your capital per option.
The underlying asset can be a stock, a commodity, a currency pair or an index. The investment process itself is based on trading of underlying assets. Also, remember be sure to use a brokerage house that offers as many as these underlying assets as possible.
Put order: By placing the Put order, you speculate that the price of an asset at the time of expiration will be lower than it is at the moment of purchase. And so as you can see, you can become the most powerful investor in the world, because for you it does not matter if an underlying asset is going up or down, or if a stock, a commodity, a currency pair or an index is making money or losing money. You are the vulcher and all you have to do is speculate which way they are going.
Range option: With the Range type binary option, you speculate whether the price of an asset will either remain in its range (thus will not grow or drop) or, on the contrary, will fluctuate heavily and finish outside the range. And so you see, high low or in the middle, you can make money.
Technical analysis is based on charts and statistics. On the basis of past performance of a
chart, the trader tries to predict the future movement of an option. And this one is for you later on, when you start to make money and are learning all the ins and outs.
As the name suggests, this type of binary option is based on speculation whether the price of a stock or commodity will "touch" the predetermined limit. You just choose whether the stock will hit the limit below or above the current price. And again, as long as it touches your range limit.
So binary options, all the terms you need to know. And now you have all that you need to know to stop raking financial leaves and begin to jump in and get your feet wet in the market. And with binary options, this is the easiest and quickest way for you to start with very little and begin making money by today. Your binary options advocate, James Dazouloute
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