Binary option is one of the best options trading platform which is fast and equally simple. It allows the trader to speculate the price movement of a particular security. The investor has the beforehand knowledge of where they stand if they win the bet. The trader eventually makes a profit, or they lose money, there is no other third route, hence the name binary. The main reason of attraction is the investor has the complete knowledge of the risk and the reward in advance.
Steps to be followed for trading in binary options
- Select a broker: The investor must choose a broker by using a review and comparison tool in order to find the best binary options trading site for them.
- Select the security: A large number of assets are used to trade in the binary options. Some of the assets that can be traded are stocks, indices, commodities, etc. The trader must select the security after proper analysis.
- Select the expiry period: The trader must then choose an expiry date for its trade
- Size of trade: The trader must set the specific size of the trade. As the entire amount traded is at complete risk.
- Select call/put or buy/sell: The trader should analyze the market trend of security in order to assess the rise and fall of the value of the security.
- Confirm the trade: The trader after fulfilling all the above-mentioned steps should check and confirm the trade.
Different forms of binary options trade
- High/low: The base of high/low trade is to predict whether the price of the security will rise or drop from the strike price at the end of the expiry period.
- In/out: The trader sets a boundary for the price of the asset that is used for trading. The trader than predicts whether the price of the security will fall in the price range or out of the price range.
- Touch/ no touch: The trader predicts whether the price of the security will touch the strike price or not. If the price of the asset touches the strike price at least once before the expiry period the trade will make a profit. If the price does not touch the target price, the trader will end up losing. A no touch is the opposite of touch.