4 Basics of Binary Options Trading Everyone Should Know

Binary Option

Wouldn’t it be nice to know that anyone can get started in binary options stock trading with a very small investment and a limited knowledge of the stock market? By making an educated guess and answering a simple yes/no question, most people can get started on binary options trading. Here’s how:

  1. Binary Options Defined

Binary literally means “having two parts”, and in the case of binary options trading your decision is to decide whether to “call” or “put”. “Call” meaning that the asset will rise in value; “put” meaning that the asset will decrease in value. The value of your prediction can be between 60-90% of your initial investment, meaning you can get your money back plus a great return if you are correct in your prediction. You must first choose an asset to invest in before you can make a decision on whether the stock price will rise or fall.

  1. Types of Assets Available for Trade

There are a variety of stock assets that are available to traders such as indices, forex, commodities or stocks. Indices include such conglomerates as the Nasdaq, Nikkei and many more. Commodities may include such hard goods as corn, coffee, gold, silver and other precious metals. Forex is the term used to refer to all major currencies lumped together, including global currencies. Stocks are the final assets available for binary options trading, and they are made up of a limited number of the world’s largest companies including Coca Cola and Google.

  1. How to Get Started

Your first step is to get educated on how binary options trading works. Several different websites offer educational opportunities to learn more about the market before you get started with trading. Educate yourself first, be conservative until you get the feel of trading, and get ready to become profitable.

  1. Risk is Limited

One of the most appealing parts of binary options trading to new traders is that the amount of risk that you are willing to assume can be limited. Before you start any trade, you will know exactly how much you are at risk of gaining or losing. Based on the brokerage house that you work with, you may either lose nearly all of your money if you predict incorrectly or you may get 5-15% returned to you.

Binary options trading is an evolving way for ordinary people to get involved in the stock market and make a meaningful income simply by doing a little research and predicting asset performance over a set time period.