Choosing a Broker

Choosing your binary options’ trading broker can get very exciting and also might be a completely new trading arena to get involved in. Below you will find a list of most popular binary options trading brokers with different platforms, to where it turn into fun. You can create a free account with all of the online brokers below and test the platform to check if it fits your style.

Binary Options Trading

Binary options trading, also known as digital options trading is a process wherein a trader purchases an underlying asset by entering into a contract at a predetermined time in the future. The trader does not purchase the asset in general but has the option to buy it. The price at which the trader purchases the asset is known as the strike price.

The underlying asset in the binary options is the asset that is being traded. This asset can be a range of products such as the currencies such as GBP and USD, stocks such as that of Apple or Coca Cola, commodities such as oil and gold, indices such as FTSE 100 or Nasdaq.

On binary options trading, the trader is already aware about the potential profit or loss in binary options trading. Thus, the buyer will see only two outcomes such as the expiry of option in-the-money where the buyer can make 65-70% payout or the option will expire with out-of-money and the owner will not receive even a single amount.

The basics of binary options trading

The following are the basic steps that are involved in binary options trading

  1. Firstly, you need to select the currency pair in which you want to trade. These may be GBP/USD or EUR/USD.
  2. Once you choose the currency pair in which you wish to trade, it is now time to choose the amount you wish to invest in the digital options. This amount can range from $50-$3,000.
  3. Once you have invested the amount, it is now time to decide whether the underlying asset is going to increase or decrease. If there is an increase, select a call option whereas in case of decrease select a put option.
  4. Once done, choose an expiry time. This could be an hour, day, week or even a month

The only thing the buyer needs to do after completing these steps is to wait until the expiry time of the digital options. The buyer will make money only if the option expires in money. However, if the option ends at out-of-money then he will make nothing.

The main benefit of investing in digital options is the traders are fully aware of the risks involved. This is mostly because the potential of risk and gains are already known to the buyer in advance. For a buyer to make profit, there has to be a substantial change in the price of the asset. To make huge profits in the binary options trading, the buyer needs to have a good amount of knowledge about the movement of the market and the underlying asset. A trader can trade in this type of instrument even if he does not have a good knowledge about the magnitude of the asset.

To sum up, binary options trading is an extremely flexible form of trading where a buyer is able to make money in a simple and easy way, that is why choosing a binary options broker is a very important step.

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