What You Need to Know

Understanding Binary Options

All About Binary Options

What exactly do you need to know when it comes to binary options?

There are a few binary options basics that every trader – beginner or expert – needs to know. For starters, binary options are simple. Just how simple are they? Well, there are only two possible outcomes in a trade: win or lose. If you make a correct prediction about the outcome, you profit on your initial stake.

There are four key steps to executing a binary options contract.

Choose the Underlying

What exactly is the underlying in a binary options trade? It is the asset, such as gold, silver or oil, that you wish to trade. At the beginning of the process, you need to determine for which of these you would like to create a contract.

Choose the Duration

How long will the contract be in effect? Each contract runs for a specific time set. With some operators, it can be as short as a few seconds. With others, it can last up to a year.

Choose the Trade

There are several types trades that can be executed. To learn more about a few of the trades that exist, you can read the article about the types of binary options trades.

Choose the Risk/Payout

With some operators, you can choose the payout, and a risk value will be calculated for you. In other instances (the more popular option) you decide how much you are willing to risk on an option, and the value of the potential profits will be calculated based on the trade type.

Pretty simple! Binary options are a great way to jump into the world of trading, so don’t want and start making money now!