The laws of trade binary options

The laws of trade binary options

When trading binary options, the trader makes a decision with respect to the future price performance of a particular asset, which serves as a so-called base value for the binary option. As the performance of these trading instruments is linked to an underlying, they belong to the so-called derivatives. Base figures available are for example forex currency pairs such as EUR / USD, but also national and international stocks and indices such as the DAX or Dow Jones available

Binary LensEspecially popular are speculations on the price movements of major currencies, ie Euro, Dollar and Pound. But commodities like gold and oil have always interesting trading opportunities. Virtually all leading brokers have a large selection of forex currency pairs and the main commodities and indices in the program so as also BDSwiss or anyoption. Assuming a trader from rising prices, so you buy a call option. With put options is set appropriately on falling prices.

Obvious advantage: risk and return clearly defined

In practice, the trade is as follows: The first issue is to opt for one of the existing binary options and therefore choosing primarily the underlying. If you have selected the classic binary options, only concerns the rise or fall of the course. Assuming a trader from rising, so you buy a call option. With put options is set appropriately on falling prices. In this way, many more trading opportunities arise, as would be the case, for example, in the classical trading with shares, in which only the rising prices of the shares are of importance.

Once you have decided to call or put, the bet is determined and with another click of the mouse the application is already placed. If the trader correct in his assessment of the market, then there is an option at the end of the term in the money and it will be paid a pre-defined return. Accordingly, in the US, the term “Fixed Return Options” (FROS) is common. In contrary scenario, the option is out of the money and expires worthless or, depending on the binary options broker, granted a partial repayment of the insert as loss protection.

In trading binary options, the investor at any time clearly in mind what level of risk it carries and the amount of possible losses is always limited. There is no obligation, as it can be found for example in derivatives such as CFDs, the trader does not have to worry about the Binary Options Broker.

The potential returns and repayment offered vary partially considerably between providers. Usually the realizable profit in the classic Call / Put trade between 65 percent and 90 percent. Therefore, our binary options provider comparison not only helps you going to keep track of the possible profit margins but also find a company that fits perfectly to your requirements from trading.

Know also the drawbacks – The risk of Traders

With binary options is not least because of the very limited option term of some 60 seconds to highly speculative trading instruments in which the luck plays an important role. So there can be no strategies in Binäroptionshandel that are promising to 100 percent onlinescam. Of course you can do so a lot in order to keep their own profit much higher than the losses realized, but even if the trader absolutely gets it right, it does not mean that the price will behave as expected. This should always keep each trader in mind and not necessarily attributable even longer losing streaks to a lack of skill.