Recently, many have been talking about binary options. Some considers them fraudulent, some - a convenient financial tool that allows you to make a profit without unnecessary effort. Let's try to figure out what it is and how it works?
A binary option is a type of ordinary option, based on the fulfillment of a certain condition at a certain time, allowing you to earn on the forecasts of changes in asset prices.
In fact, a binary option is a convenient financial tool for earning money on price speculation. It is allocated with a fixed value, that is, the holder of the option will receive exactly as much as was agreed in advance. Many people compare the principle of binary options with a game of roulette or with a bet, and in some ways they are right.
For a trader to be profitable it depends on his ability to correctly predict price changes and calculate the time when this will happen. If he turns out to be right, he will receive a predetermined amount; if he makes a mistake, he will lose the money invested in the option.
What is important to clarify, the size of the changes often does not play a role at all .For example, if a trader believes that the price of an asset will rise by a certain amount, even if only slightly, and acquires the corresponding option, then if he proves to be right, he will receive money. How much the price has risen, it is not significant here, the fact of a change in this direction is important. If the price, on the contrary, goes downward, the trader will lose the money invested. The same will happen if the price does not change by the end of the agreed period. The end time is called the "date of expiration." This period can take a couple of minutes or several months. Typically, short-term options are popular.
The amount of income received depends on transactions, usually 60-70% of their value, but transactions with 100% profit are also found. As a rule, the more difficult the forecast itself, the higher the profit. Binary options are completely legal and based on correct forecasts, that is, almost everything here depends on the traders themselves.
The abundance of a variety of transactions in binary options suggests many varieties of option contracts. But there are several common ones that are usually most popular.
If the trader believes that the price will reach a certain limit, he enters into a contract for the One Touch option. But it can act on the exact opposite outcome: that the price does not reach the target, then the No Touch option comes into play.
This type of option is associated with increased risk and is not recommended for beginners.
Binary options are constantly being debated. Many scam companies, which promise mountains of gold and instant wealth, but bring nothing to their customers but losses, have also played a role.
As you can see, binary options are an affordable financial tool for making money. But it is associated with great risks and the skill of the traders themselves. Therefore, it is recommended to start trading with binary options of relatively low cost in order to gain experience and understand whether it is worth continuing to trade with them.
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