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Binary Option: What Is It All About?
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Posted On :
Dec-22-2011
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Article Word Count :
539
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Do you enjoy taking risks with money? Binary options trading could be for you. You'll find big gains to be made when you know how to play the game. This post breaks down the basics behind it.
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In finance, a binary option means an option in which the payoff will be an specific amount of a specific asset or nothing at all. It is known as a binary option as there are only two outcomes possible. This contract is also known as an all-or-nothing, fixed return, or digital option.
You can find two types offered - the cash-or-nothing option and the asset-or-nothing option. With the former, you get paid a fixed amount if it expires in the money. However, the latter pays the value of the underlying assets.
How does binary options trading work?
Binary options trading works like this. In place of buying or selling assets, you'll be asked to place a "wager" on how a certain stock or market will move. For instance, if you feel a specific commodity will be higher at a certain period, you place a trade under a "call option." For those who believe otherwise, you trade under a "put option."
What goes on after i invest in options trading?
It would depend on the platform you choose. With a regular option, you will find there's specific waiting period before the trade contract starts. You will also need to wait for the payout date as this could be set for several days later.
Binary options trading are a lot different. A person might start a trade contract far more quickly and set this against an hour's time. By way of example, a contract can start at 12 noon and expire one hour later.
The profit to be gained depends on what platform you're looking at. Regular option trade profit will hinge on the quantity of the asset traded. Binary option investors aren't impacted by such price movements. It is because contracts would depend specifically on if the asset went above or fell below the original contract price.
Which is the practical investment choice?
It really depends on which kind of investor you are. You will find many people trading regular options as it allows them to practice their analytical skills. If you enjoy following the latest market updates, this could be for you.
Binary option works best for people who are not as worried about price movements or market behavior. Traders who engage in this need not be concerned about the amounts they get. The trading approach here is simpler and a lot more direct. Investors know the amount they're getting whenever they enter a trade.
Still unclear about which investment to choose? Talk to seasoned investors or financial experts. They are the people who could guide you along the way. Studying each option will also enable you to figure out the best investment for the money. Read as much as you can on binary options trading. There are a lot of success stories about people who made money on this investment.
With the world becoming an unstable place, it is easy to undestand why people turn to binary options trading. They want to have as much eggs in their basket. Enjoying the rewards from this type of trading allows you to have a fallback. This is ideal should you get sick or fall into bankruptcy.
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Article Source :
http://www.articleseen.com/Article_Binary Option: What Is It All About?_123287.aspx
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Author Resource :
Mark Oberg has learned a lot concerning binary options trading and knows a company with plenty of experience in binary option.
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Keywords :
binary option, binary options trading,
Category :
Finance
:
Currency Trading
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