If you think that trading on the stock exchange is very complicated, binary trading will certainly surprise you. It is as simple as choosing between up or down. The outcome can also be only two things: You win or you lose. Let’s take a closer look at this trading strategy that has been approved by the Securities and Exchange Commission, since 2008.
Trading in its Most Basic Form
Do you think you can predict if the price of cereals will be higher or lower, in 30 seconds, an hour, a day, a week, or even in two months? Or if the price of gold will increase or decrease in that amount of time? These are the kind of questions you will be looking to answer, if you choose to enter into the stock exchange, via binary trading. Of course, to do so, you will need to find the best binary trading website to handle your transactions. That is of outmost important, since all actions you will make, will be a binding contract, which you will have to oblige to, no matter what the outcome is.
But what can they be? That is the beauty of binary options. There can only be two results: You can win and gain capital on the money you invested if you were right or lose it all, if you were wrong. Some people tend to compare it wrongly to betting on black or red at the roulette, in a casino. However, in such establishments, the chances are literally 50/50. In binary trading, if you do your due diligence right, and you read and enquire about what you will invest on, then chances are slightly on your side. However, it doesn’t mean that you can’t be wrong. All the best teams in sports league don’t end-up winning the championships, do they? And so, it is possible that your investment seems safe, but that for one reason or another, things don’t go the way you planned, throughout the duration of the contract.
What are the Options?
There are various ways you can do binary trades. Below, we explain the options offered to you.
Also known as the High/Low trade, it is the easiest one to understand. You Choose the product and you say if its price will be higher or lower, at the end of the contract, then when you opened it.
The ladder also takes in account if the price will go up or down, but also include various levels. Therefore, if the price reaches that level before the end of the contract, the gains will automatically be paid out.
Similar to the ladder, this contract indicates the price that needs to be reached (higher or lower). If it touches it, the contract is closed and paid out.
It might be the most complex version of binary trades. The contract indicates two levels of prices: One that is higher, and one that is lower than the current price. Then, you can decide if the price will remain in-between these, or if it will go beyond or below. Depending on the outcome, at the end of the contract, you will either gain capital or lose the money you invested.