What are Binary Options?

FinanceTrading / Investing

  • Author Clark Kenada
  • Published October 11, 2010
  • Word count 505

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In the world of finance you likely hear about the concept of

'options' all the time. You hear about forex options and stock

options but you may not have heard about binary options.

Binary options are a bit different from standard options simply because

they are not quite as flexible. When you are dealing with binary

options you are dealing with a payoff that is a fixed amount.

If your payoff is not that particular amount then you will receive

nothing at all. In other words you have two types of binary

options: cash-or-nothing or asset-or-nothing. These are called

binary options simply because there are only two possible outcomes

similar to the binary language.

Binary options are becoming more and more popular simply because

they are a great way to make money. Essentially one will wager that

a security will close above or below a certain price. If this turns

out to be true, then a fixed payout is received. Typically if a

trader loses the wager they will receive a credit of 5-15% on their

original investment.

But why are these options so popular? What makes them so much

easier than your standard trading options and why should you choose

them? If you have ever attempted to trade on the forex or any other

type of exchange then you are probably quite aware as to how these

binary options can be beneficial to your efforts.

Many individuals who are new to the forex will find that it is very

difficult to trade in the conventional way. There is quite a bit of

work involved and this is evidenced by the number of books and

programs available on the internet pertaining to forex success.

There are many people who use the forex for years and find that

they are simply not cut out for it. With binary options however you

may profit based on your own opinion and there are very few people

who cannot provide their own opinion.

Binary options can be traded in a number of ways. They can

obviously be done in person, but the majority of people will choose

to do them at home simply because the internet has provided a

method for everyone to get in on the stock market. These days many

people have started making their income at home by trading on the

forex and the ability to trade binary options has certainly helped

with that end.

Just like any other option however, you should do a bit of research

before you simply jump right into it. This may be the easiest

option available but if you want to make money you will still have

to put the work in. Remember that nothing is guaranteed and you

won't be surprised on the trading floor.

Open an account and fund with over $500 and we'll give you a

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Clark Kenada trades for a living and has produced many trading strategies he uses for himself and his student. Right now he's focusing on binary options trading, day trading options due to the new opportunities created with this new market. http://www.binaryoptionssystem.com/ is the site he gets his strategies from

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