Understanding binary options is not a difficult task to accomplish. It is a kind of speculation where the price of speculation is represented between 0 and 100. If the odds event is successful, the settlement is made to 100; Otherwise, the settlement ends in 0 indexes. However, the price of the event is marked by binary option brokers. If you imagine the event to take place, the purchase option (purchase of the event) is made, or the sales option (sale of the event) is made. This can be better explained by the examples below.
If you expect McDonald's shares to close above the $ 80.52 spot price within an hour, choose the binary buy option and invest $ 100. If the expectation is successful, the payment will be 70% or more, that is $ 170 or more. If McDonald's shares do not close above the share price, you lose 85% of your investment and get only $ 15. This is the main advantage of trading binary options, as before you start your trading at exactly the risk of losing a percentage of the investment and the opportunity to make money.
Important concepts in binary options trading
To understand binary options trading strongly, it is important to understand the following concepts:
Price barrier: is the exercise price at which the trader can buy or sell the underlying asset.
Expiration date: the period during which an option is closed or expires.
Types of binary options
The following are the different types of operations with binary options with the same trading principles with small variations:
Tall short:
This type of trade is about choosing a buying or selling opportunity. If a trader assumes the shares end up with the price above the strike price, then you must choose a call option. And if an operation predicts that the stock price will show a downward trend within the due date, buy the option of lowering. However, this can be called up / down trading in some trading platforms.
outside:
This type of trade is also known as tunnel or top binary option brokers 2017. In this type of binary options trading, the trader sets the price range to negotiate consolidations and price distributions. The dealer then buys an option that predicts whether the price will be controlled by the tunnel, boundary or price range that is 'IN', or whether the price will escape through the tunnel area (OUT). However, using turning points would be helpful in this type of binary options trading.
Touch / No Touch Options:
In this type of trade, there are predictions as to whether or not the expected price will affect the price barrier. Especially in the trading of binary options, the operator buys an option in advance that the market price will affect the target price within the expiry. If this is correct, profits are achieved; otherwise the merchant will end the loss. Non-touch binary trading is the exact opposite of binary touch trading. In this type of trade, the trader speculates that the target price will not affect the market price of the underlying asset. If the trader succeeds in his fears, the settlement is made in money and the profits are generated.
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