BEGINNERS GUIDELINES FOR INVESTING IN BINARY OPTIONS
What Is A Binary Option?A Binary Option is a simple investment, simpler than most other kinds of market investments.When investing with binary options you know there are two possible outcomes before you invest.This is why it is called "binary". You will either make a predetermined amount of money, or you willmake nothing.Initially you invest a predetermined amount of money in an option. It is important to note that younever actually buy the stock, commodity, currency pair, or even entire index, which is theunderlying asset. When you place the invested amount, you decide whether you want a "call"option, or a "put" option. A "call" option will expire "in the money" if the underlying asset expiresabove the strike price. Basically, you are saying that the underlying asset is going to go upbetween the time of your investment, and the expiration time. This can be one hour, one day, orone week later.Now, a "put" option is the opposite. You will expire "in the money" if the underlying asset expiresbelow the strike price. Expiring "in the money" means you will be paid. The amount of the payoffusually falls between 65% to 81% return. This is also known before the investment is made. If theunderlying asset expires "out of the money" you will recieve nothing in most cases. The examplebelow shows the details of an imaginary Binary Options trade.
What Is A Binary Option?Example:This is an example that uses the imaginary stock "ABC". The value of the stock, and the amountinvested are fabricated for informational purposes only.Call Option For ABC with 72% Return:Amount invested: $100Value of ABC at Strike Point: $44.25Possible Outcomes:Value of ABC at Expiration> $44.25 - Investor receives $172Value of ABC at Expiration< $44.25 - Investor receives $0Put Option For ABC with 72% Return:Amount invested: $100Value of ABC at Strike Point: $44.25Possible Outcomes:Value of ABC at Expiration> $44.25 - Investor receives $0Value of ABC at Expiration< $44.25 - Investor receives $172
Binary Options BrokersThere are many binary options brokers, or trading platforms. They are all online, and offer similarservices. Two are outlined below. I have chosen to focus on these two because I believe theyrepresent the very best places to trade binary options online. Select the broker that best suits yourneeds, and you can start investing today.Anyoption.comGlobaloption.com
What Is Anyoption?Anyoption is unique from most brokers. Anyoption is unique in what it offers for underlying assets,minimum trade values, "out of the money" returns, and "in the money" returns. Anyoption is theonly broker to offer 15% returns on "out of money" investments. This is very important, and shouldbe considered carefully when selecting a broker. The chart below shows what are offered forunderlying assets.
What Is Anyoption?Anyoption has added some new and exciting features recently. Now, for a premium, you can takeyour profits before the expiration of the option. Also, for a premium, you can now roll the optionforward, thereby delaying the expiry time. These features are unique among binary options brokersand they offer another reason to favor Anyoption over the rest.
Binary Options System So you have decide you want to use binary options to invest your money. It is a great choice. Many people have been making extra income, or even full time income using this fantastic tool. They are known as user friendly, and very simple. That is what draws many people in. The thing is, some still find it hard to get a leg up because they either dont have the time to put into researching stocks, or commodities, or they simply dont know where to get that information, or how to put it to good use. Some have turned to a service that provides binary options signals, and they use the information they pay for to make better decisions. That is a great way to go for those who do not have the time to gather that useful information that leads to successful investing. For many, this is still a bit of a head scratcher because the idea of making timely trades based on key signals is still inconvenient, and difficult. For what is supposed to be a simple endeavor, it gets complicated quick. For those of us that want true simplicity there is an entire binary options system. Also, if you have been trading digital options for a while, but have found it difficult to find any consistency in making successful investments, a system can certainly put you on the right track.` So, if you are looking for the simplest way to get started in this new investment arena, or if you have been trading for a while, but have not reached the profits you had hoped for, dont waste any more time. Get on the fast track to profits with a binary options system. There might be a few available, but there is one that I recommend because it works. It is:
Binary Options BlueprintNow, if you are looking for a good place to begin trading, make sure you find out who the best binaryoptions broker is. You want to put your money in a safe, reputable place. Also, dont forget that thissystem is meant to help you increase profits, and reduce losses. They do that very, very effectively,but remember that the stock market is not 100% predictable, and there will still be times when youwill lose money. If you keep that in mind, and keep a level head, you will succeed in this business,and see all the great profits that you have been dreaming about!
Binary Options SignalsWhat many people do not realize about binary options, is the fact that there are ways of seeing achange in a particular stocks value before it actually happens. You might know that there areearnings reports, product recalls, and new product announcements that can give you the edge in thebinary options game.You can find some of this information on your own, through a lot of time consuming research, or youcan find a website that you trust to provide you with some of these sought after signals.It is by no means necessary to use a signals service, but to save a lot of time searching for signalsyourself, or to increase your efficiency and effectiveness, it can be a true bargain.I find binary options signals to to be invaluable. It is not a flawless system, but it helps savetime, and increase profits exponentially. I use: Binary Options Pro SignalsYou also must remember that nobody can predict the changes in the stock market with 100%accuracy. With that in mind, there are good resources out there that really can help increase yourprofit. Even if you try them out for a little while I think you will realize what you have been missingout on!
A Good Binary Options Trading Strategy• There are not very many different strategies that can be used when dealing with binary options. There is one binary options trading strategy that is successful. It involves buying both a call, and put option on the same underlying asset. The idea is to minimize potential losses, and maximize gains. Certain circumstances must be met for this strategy to work, but if you find yourself in the right situation, you have the power to save yourself much of your potential losses, or even double your potential gains.• Ill give an example. You buy a one day call option on ABC at a strike price of $51.25. After a couple of hours, you find that your investment is currently in the money. At this point ABC has risen to $52.10. Thats a good jump for a couple of hours. You might consider purchasing a put option right now. If there is any reason to believe that ABC will drop, or even level off at this point, this would be a wise move. The amount you put into each option should be identical. This will give you a range in which you can double your profits. In addition, if the asset continues to rise, or if it drops below the initial $51.25, you will only lose a small fraction of what you might have lost otherwise. The same can be done when buying a put option first. If the investment is initially in the money, consider buying a call option of the same value, on the same asset. A simple binary options trading strategy to limit losses, while maximizing gains. Ill provide a better example below.
Binary Options Trading StrategyExample:Binary Options Trading Strategy Example:This is an example that uses the imaginary stock "ABC". The value of the stock, and the amountinvested are fabricated for informational purposes only.One Day Call Option For ABC with 72% Return:Amount invested: $100Value of ABC at Strike Point: $44.25Lets say you purchased this option at 10 am.Lets say at 2 pm ABC is valued at $46.10.That is a large increase for 4 hours. It might be somewhat unexpected.You should consider buying a call option for $100 to double your profits if the stock drops fromthere.One Day Put Option for ABC with 72% Return:Amount invested: $100Value of ABC at Strike Point: $46.10
A Good Binary Options TradingStrategySo now you have the two options above. They both expire at the same time, at the end of the day.There are three possible outcomes, but only two possible financial outcomes. Lets see what theyare.First:ABC expires between $44.25, and $46.10.Result: Both options end in the money. Profit of $144 for total returns of $344.Second:ABC expires above $46.10Result: Call option ends in the money for returns of $172. Put option ends out of the money for lossof $85 (assuming you use Anyoption which guarantees a 15% return on out of money options) for atotal return of $187. Not a terrible loss on an investment of $200. Net loss of $13.Third:ABC expires below $44.25Result: Call option ends out of the money for a loss of $85. Put option ends in the money for returnsof $172. Total returns of $187. Net loss of $13.
StocksStocks are probably thought of first by most people who are looking at investing money. Everyoneseems to know that you can buy stock in companies that are owned publicly. When you do this, youare a percentage owner. Stocks are sold at a value that is determined by a number of factors. Thesefactors include: the success of the company, the competition for ownership of that company, andwhat people are willing to sell for. Lets look a little closer at the advantages, and disadvantages ofinvesting in stocks compared to investing using binary options.AdvantagesThere are some great things about buying stock in a company.- You own a piece of the company.- Dividends. You get a percentage of the profits.- Own long-term, or short.- Generally speaking, stocks always have some value even if it has dropped from the purchase price.
StocksDisadvantagesThere are some things that are not so great about buying stock in a company.- High initial investment.- Difficult to make a short-term profit.- Broker fees. In order to buy stock, you will have to go through a broker that will charge acommission, or fee.- Smaller profit margin. Unless you get really lucky with a skyrocketing stock, profits are usuallysmall.When you look at the pluses and minuses of stocks, you can see how they stack up compared tobinary options. You will need to invest much more money in stocks to make an equivalent profit. Theprofit margins will tend to be much lower, if you are indeed lucky enough to make a profit at all.There are good reasons to go with a stock investment. If you are looking long term, and if you pick astable company with plenty of growth potential, you can end up in very good shape. It is certainlyworth noting that if you do own stock in a profitable company, you can receive some very lucrativedividends on a regular basis.
CurrenciesCurrencies are an interesting way to invest. It seems odd that you can even use currency to makemoney. How does it work? There a few different ways that you can do this. Basically, you are tryingto profit on the differences in the value of different currencies. The most common way is through aspeculative market that relies on a change in value. This type of investment is probably the closest tobinary options. There are however, significant differences. Take a look at the pros and cons below tosee if currencies, which are also know as Forex, are another option for you.AdvantagesSome things about forex that are great.- Huge potential profit.- Very quick returns are possible- Available to trade online.- Abundant resources available online for information.
CurrenciesDisadvantagesSome not so great things to consider about currency trading.- Quite risky.- Requires a lot of research to be done correctly.- Looked at in a negative light by many investors.If you look at the good and bad aspects of currencies, you will find many similarities to digitaloptions. The difference is in the process, and diversity of what you can do. Forex lacks thesimplicity, and easy access. You cannot profit on a variety of stocks, currencies, commodities, andindices like you are able to with binary options. A good way to go, but in my opinion, not one of theanswers for a successful investor.
Binary Options: Risky, ProfitableI think it is very important to think about what you might lose or gain when you invest your hardearned money. You do not want to put yourself in a position of vulnerability by investing more thanyou can comfortably afford to lose. This is especially true in the world of binary options trading. Youcan make huge amounts of money using binary options, but only if you can afford to lose hugeamounts of money without it ruining your life. The key is to invest to your budget.You can make a very tidy profit using binary options without risking your life savings. If you havedreams of living in the lap of luxury with no concern for money, it can be done, but you must workyour way up to that level. Do not try to make a fortune overnight. Learn and invest, and slowly buildyour wealth. This is simply an easier to understand way of doing it. There is one truth to understandwhen you are investing. You will lose money at some point. It is unavoidable. The key is making aprofit most of the time.If you have the time to really do some work, you can make good money online using this type ofsimple investment.
Mutual FundsIt is interesting to talk about mutual funds here because the goal of fund like this is usually to makea decent rate of return over a long period of time, so the comparison to binary options is kind ofdifficult. Under most circumstances one would not be considering both of these investment tools asdistinct opportunities. What you might do is have a mutual fund for the long term, and use binaryoptions as a short term thing.So how does a mutual fund work? Well the term mutual basically means that there are a group ofinvestors who are mutually interested, and invested in the fund. What the fund is can depend, but itcan consist of a combination of stocks, and bonds, or other securities. There may be somecommodities involved, but the idea is generally to stay diversified. So lets have a look at theadvantages, and disadvantages.Advantages- Relatively safe.- Long term stability.- Invest, and forget.- Good option for retirement plan
Mutual FundsDisadvantages- Very little control.- Long term.- May require a reasonably large initial investment.- Low rate of return in short term.