What are Binary Options and how they work?

What are Binary Options and how they work?

Looking for a good way to make the existing capital gains, encounter increasingly traders to binary options. When still a young financial instrument, the binary options have established more and more in recent years. But what exactly is meant by this term, how does the trade and what to look when searching for a broker?Binary computer

Binary options or digital options are new financial instruments with which traders can profit from both rising and falling prices. Unlike traditional options Binary options are already being traded with very little capital, making them particularly interesting for beginners.

The term “binary” already signaled the simple operating principle of these trading instruments Learn about Binaries. One option may only 2 states, namely “in the money” and “out of the money” – similar to the digital states “1” and “0”. It only comes out on whether the option is at the end of the option period (expiry time) in money or not.

How do binary options?

If the dealer from rising prices, so he buys a call option. With put options is set appropriately on falling prices. For the successful completion of a trade, the price therefore higher (call option) or decreased (put option) must write down as the entry point at the end of the term. The trader shall, in binary options trading so only one direction decision with respect to the performance of a particular asset. This asset acts as a so-called base value for the binary option. In the graph the forex currency pair EUR / USD is the base value of the option More Binary Option Tips.

The price of the underlying at the end of the option period is thus crucial in determining whether the trader earns money. If the trader correct in his assessment of the market, so the option is at the end of the term “in the money” and a pre-defined return is paid by the broker. This is the classic trade, depending on the provider, usually between 65% and 85% of the stake. In case of loss, many providers offer a refund of up to 15% as a hedge. The binary options trading is usually possible since inserts 10-25 euros per trade. A detailed overview of the minimum trade sums and repayment rates can be found in the broker comparison.

IQ option: Best Binary Options Demo Account

Even if it only once sound, as though the binary options trading is not much to be done wrong, are also quite losses, in some cases the entire capital, possible. Therefore, it is recommended for beginners, without the use of capital to test once the procedure and to make it as an image of the binary options trading. This works well, for example with a demo account for almost all brokers. The best brokers are to be found in our broker comparison. Simply search providers and create demo account.

To use binary options, is basically easy to understand. The trader is not an asset, but the corresponding price development of this Underlying. Here decides the trader whether to accept a call option is a rising or a put option has a falling price of the underlying. Is he really at the end of the option period, he scored the respective income. However, it is important to have a good broker at hand, in which the trader takes along well and facilitates the transition in the binary options trading through a demo account.

Even if the operation of binary options trading is very good to understand, stands and falls for many traders, the success with the broker. In broker comparison, Check Binary Works there is a useful overview of the best ones. The IQ option demo account has this proven winner when it comes to binary options demo account. Exactly such a provider should be controlled, if one wants to learn to trade in binary options.