Binary options trading are becoming extremely popular all over the world due to the high returns in a very short time. This new tool of trading in the financial market involves very less risk and because of that even those traders have dared to enter the market who never could think of trading in this highly volatile market and that too with a very little capital. Binary options have provided a hope to those who wanted to earn some extra money after they suffer heavy losses in the recession. This tool has given them a hope to cover those losses and also add some money to their routine income.
It is true that binary options trading are quite easy to understand and anyone with little knowledge can trade binary options. But one thing is for sure that you must have the basic knowledge of the tool to make your trade successful. With their hourly expirations and fixed yields, online binary options have provided a new vision to the traders that they can now trade in the market on their own without any middleman. Having the capacity to provide quick returns in a very short time, binary options are virtually a new concept for many traders and many of them do not even know this tool.
For those, who are yet not familiar with binary options, here are some characteristics of binary options:
- Unlike other stock trading methods, there is no stock price, no spread, no call or put premiums for binary options trading.
- There are platforms that allow you to trade free of cost.
- The holding of the option can yield up to 81% depending on the asset.
- The expiration period can be one hour to one day or one even one month.
- Only the highly liquid or best known assets are traded in this way.
- There is no margin in the strike price and the result because the rates of profit are fixed.
- The buying and selling price of the option is fixed.
- The risk involved is known to the trader at the start of the contract.
- The movement in the stock price is irrelevant once the option has started. Only the direction of the strike price is considered.
All these characteristics of binary options make this tool all the more attractive but you have to plan well and apply some good strategies to make your trade a successful venture. The most attractive part of this trading method is fixed contacts and there is no transaction cost involved. In the US, income from binary options trading is tax free which is another feather in its cap. You only have to estimate the direction of the asset over a fixed time period and a right prediction gives 65% to 81% more than your investment. Initially, you should start the trade with a small amount of capital and as you gain experience, you can gradually extend your trade. If traded with good planning, binary options can prove a minting machine.