When contemplating on placing your investment assets in binary options trading, the first step to take is learn the important facets of this financial trading concept. Start with knowing why many have taken interests in putting their money on binary options. In the same light, have an understanding that there are also risks involved.
What are Binary Options and What Makes It Different from Conventional Methods of Trading?
First off, have a clear understanding that binary options are investment products, which you can offer as trading instruments. However, under binary options trading, you stand to either gain quickly or lose all just as fast.
Trading with binary instruments is quite simple because you simply have to give a “Yes” or “No” answer, to signify your decision to invest a specific asset. That is mainly because trading on binary options works within a limited time frame..
Simply stated, prospecting on an investment product and its future gain works only up to the expiration of the date or time on which you are officially recognized as a party to a specific binary options trading activity. .
Keep in mind that binary options come with an expiration of time or date. When said expiry time or date is up, you can gain if your futures projection on your asset is on the side of the strike price; or that price that yields the profit you expected. However, if the price is below the amount you projected as future gain on an investment asset, you stand to lose your money to those who traded on the outcome or the position opposite to your Yes or No decision.
In binary options trading, the results are exercised immediately, which means if you gain you get to claim the profit right away but based on the yield you projected. Similarly, if you lose, your investment asset goes to the trader/s who made a bid against your futures projection. Win or lose, you do not have the right to sell your investment asset.
It’s as simple as placing a bet on a high or low number, which makes binary options trading sound risky. That is why you cannot just dive into it without completely understanding how you can reduce, if not eliminate the risks involved.
Important Aspect to Look for in a Broker Offering Binary Options Trading
As in any kind of financial trading, placing your investment asset under a binary options trading-arrangement, requires opening an account with a reputable and licensed broker. It is important to check if the broker is duly recognized as a licensed and/or registered broker in your country, because some jurisdictions do not recognize binary options as a legitimate trading activity.
“IQ OPTION LTD” (https://ipoption.com/) for one, is a certified broker in Europe. It is recognized and registered with the EEA ànd Cyprus SEC under the trade name IQ Option Europe Ltd.
However, this broker does not offer its platform and services to users in Australia, Belgium, Canada, U.S. and middle eastern countries like Israel, Iran, Palestine, Syria and Sudan, or in Southeast Asian countries like Japan and North Korea.