Best Binary Options Brokers

What are binary options?


Binary options are options that can be traded on different financial markets around the globe, wherein your success will depend on how rightly you as a trader can predict the price of an underlying asset which you are trading and to which the price you are required to predict is tagged with. In other words, your success in binary option trading will depend on how accurately you can make use of the price fluctuations in the market related to your trading asset.

You will come across many such definitions about binary options that use a simple sentence to explain the gist of trading these options. It says that when you trade these options, you either lose whatever you have invested or you win whatever you have invested. However, for a first time trader, this definition may not be clear as this concept is only the tip of the iceberg. Let us delve deeper into the subject.

Binary options explained

Also referred to as “exotic options”, binaries are often known as FRO or “Fixed-Return Options”. They give access to forex, commodities, stocks, and indices in an easy-to-trade manner. Another reason why these options are called 'fixed-return options' is because they include the concept of expiration date and time. as well as the so called strike price or the target price. This can be better understood with the help of an example.

Let us say you are a trader and you have selected the asset X. You as a trader will have to predict the movement of the price of an asset that has to be reached within the expiration date or time. Not only that there is a strike price, which will be your target price and when the price you predict is close to the strike price or at the strike price, you will be paid a fixed return. On the other hand, if you are not able to predict the movement of the price of the asset you are trading within the expiration time or date, you have lost the trade and you will lose the money you have invested.

Call and Put Options

In the event, the market conditions are good; a trader will rightly opt for the “call” option. In order to make this option work, you will have to predict a price that is higher than the strike price and at expiration time/date.

Alternatively, when the market is not conducive for trading, you will opt for “put” option. In order to make the “put” option work, you will have to predict a price that will be way below the strike or the target price at time or date of expiry.

With the advent of the several trading platforms and their effort to retain traders and customers, you will come across many trading platforms or the binary brokers that do not dishearten the traders fully and pay a lump sum (not a very high amount) so that the trader gets compensated partially for the loss of the investment amount. This payout will, however, differ from one trading platform to another. As compared to the traditional methods, the risks involved, the returns, trends, and the strategies differ widely.

Role of binary brokers in trading these options

When we talk about binary options, the role of the brokers cannot be undermined. They are crucial to the success of any trade and can also be responsible for driving you to lose all your money or drive you to win a fortune!

Proper guidance by the brokers on the following can decide the fate or the outcome of any trade. These are:

o Selecting the right asset
o Offering educational guidance
o Predicting market trends and trading patterns that will work for you
o Offering appropriate solutions that are customized

Porter Finance
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The information available on this website is only informative and should not be considered any kind of advice or recommendation. Our website is not responsible for any potential loss that might result from your investment activities. We do not guarantee nor endorse any of the brokers listed on the site. All of them are independent companies that have nothing to do with us. Investing in binaries is your sole responsibility. Any loss that you may incur is the results of your independent actions and cannot be blamed on any third party. We are not liable for the information you will find on this site.
Risk Warning: Trading in binary options is a high risk type of investment that can result in the complete loss of the invested amount. Options are derivative instruments and the potential loss is equal to the entire investment. This type of investment is not recommended for people with risk adversity and with lack of knowledge in the field.
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