Binary options are trading options with a winner take all aspect

Binary options unlike other types of trading, you always know what you'll make or lose when you trade binary options. That's because you'll never lose more than you invest and could make a profit on your money. They are based on $100 contracts. The price for an option is set by the likelihood the event you predict will come to fruition.

Binary optionsIf you decide the a commodity will be at a certain price, but the likelihood of that happening is low, such as a 20 percent chance it will happen, you'll invest $20 in the hopes of making $80. If the price doesn't reach your expectations, you'll lose the $20, but if it does, the other person in the contract will lose their $80 and you'll gain it.

Binary options have an expiration date

If binary options are not exciting you due to tracking long-term investments and you don't have the money to be a day trader, you'll appreciate the short term approach used in these options. These options may expire at the end of the day, intraday, weekly or at a specified time and date in the future. Nadex---North American Derivatives Exchange---is where binary trades occur. They provide a live binary trading platform with real-time charts and option prices. You can also trade these options at CBOE—-Chicago Board Options Exchange. You can trade here if you have an options-approved brokerage account.

Get out of the contract early and cut losses or lock in profits

Even though there's an expiration date, you can trade your contract early to lock in a profit or limit a loss. Since you lose all your money if you predicted wrong on a contract, saving a some of it may be of interest to you if you change your mind and think your prediction is wrong. You can trade your option at any time and close out your position. For instance, if you purchased a contract where you paid $50 but the market shows differently, you might sell it for $30 dollars, cutting your loss to $20. If the option is in the money and seems like it will come to fruition, you could lock in your profit and sell it for $70, making $20.

Contracts cover a wide variety of investments

You don't have to stick to commodities futures, stocks or even forex. Binary options are on a wide variety of financial vehicles. You can also use these vehicles for contracts on News Events, such as whether the Feds will raise or lower interest rates. You can purchase a contract on almost any type of financial news or vehicle, much like wagering in Sports Book is in Vegas. It's a winner take all proposition that costs $0.90 to enter a contract and $0.90 to exit with a cap at $9.00 regardless of how many contracts. These are affordable investments that settle quickly and can be profitable even in stagnant markets. They can provide a nice supplement to other types of investments.


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