A binary option is a new financial instrument which is designed for easy usability. Everyone can learn to handle this derivative in a very short time. It is very exiting to trade with binary options but the best thing is that the profit margins are extraordinary large: You can make between 75% and 400% in just a couple of minutes. You might try this with stocks or bonds and you will see that this is simply not possible with traditional investment instruments. These profit margins can only be made with binary options.
If you want to become successful in trading you have to find the right partner – you have to find the right binary options broker. Unfortunately this is not easy because there are a lot of companies out there already. One of the best is 24Option for sure. The brokerage company from the UK stands out with an excellent and secure trading platform, a highly motivated support team and a great VIP program.
What are binary options?
Basically, binary options are a kind of contract between a trader and a broker. The return is fixed and predetermined and if you want to trade you have to use a brokerage trading platform. For example: You can buy an option for 100 Dollars and you can bet if the option will close higher or close lower at expiration. If your prognosis comes true you will get 180 Dollar back – if not, you will loose your bet. It’s an all or nothing bet and therefore the return is extraordinary high.
Ok. If you are trading binary options you are betting on an underlying asset price to rise or to fall until expiration of the option. There are several asset classes like stocks, stock indexes, currencies, commodities and precious metals you can bet on and there are several option classes too: the standard binary options high/low, touch options and range options. When trading touch options you have to bet if the price of the underlying asset will touch a certain price level or not. When trading range options you have to bet if the price will stay within a certain range or will leave this range.
Let’s take a closer look at a touch option trade: The price of Microsoft is currently $25. You buy a binary touch option – set price $27 – expiration in two weeks. If the price of the Microsoft stock touches or rises above $27 at least once within the next 2 weeks you will win. It doesn’t matter if the price comes back again and closes at $23. It’s just important that the price touches $27 once.
Binary Option Brokers
Finding a reliable and reputable broker is one key to success in binary options trading. You have to find a brokerage company where you feel absolutely safe and you can focus on your trading. You have to know that you can rely on your broker and rely on the support team. If there are troubles it’s necessary that the support team is competent and fixes your issues as fast as possible. In addition, the profit and return should be as high as possible. You might don’t believe it but the return can be 75% with one broker but 85% with the best. That’s a huge difference.
The broker which a trader has the most sympathy for is the first choice for many new folks in the market. They don’t compare the pros and cons of different companies and that’s a huge mistake. A huge amount of money can be made in the binary option brokerage business and therefore there are some brokers which aren’t in the business for the customer but just for the profit itself. You have to be aware of these black sheep and their scam operations.