Thursday, September 9, 2010

Binary Options

Binary Options trading is the easiest and most popular form of online trading. If you want to make money by trading commodities, stocks, indices or forex pairs and you are not an expert trader, you should try the binary options trading.

What is a binary option?

Binary options means there are only two options possible: Call and Put. You can buy call options or put options on any asset, from indices to forex. A call option means that you estimate that the asset value will increase while a put option is bought when you estimate that the value will drop.

All binary options have an expiry date and hour. The most popular binary options are the hourly options. Hourly options expiry at the end of the hour, and can be purcahsed 15 minutes or more before the expiry date.

Let's have an example of binary options trading:

You estimate that the value of the Microsoft shares will increase before the end of the hour. Let's say we are at 13:25 and you think Microsoft shares will increase in value by 14:00 (in the next 35 minutes). You buy a call option on that asset and if the value of the shares increases you will earn a profit of around 65% - 81%, depending of the option payout (you will know this payout before purchasing the option). If the value of the asset drops, you will lose the option. However, most binary options brokers give a small refund on losing options, ranging from 4% to 15% of the option's price.

Where can you trade binary options?

Binary options can be traded at any binary options broker. There are a few binary options brokers on the internet that offer options on different assets with different payouts, but most of them are quite the same. You can make fast and easy profits by trading binary options.