RSS

Binary Options, The New Investment Tool For the on-The-Go Investor

August 27, 2012

Options

Binary Options, The New Investment Tool For the on-The-Go Investor

Binary Options trading has exploded into the fast pace life of the mobile on-the-go investor. With its simplistic 3 click trade execution, its use has spread to the mobile smart phone world like wildfire. Trade anywhere, anytime, and with any mobile phone. Yes, there is an app for that.

A Word About Risk

First, let us take a step back and build some groundwork and emphasize a word of caution. Trading in the currency, stock, commodities, and index markets with Binary Options involves risks. You should only trade with monies that you can afford to lose. You should never use funds from your retirement accounts, your child’s school savings accounts, or personal savings accounts. Also, you should never use money from credit card accounts that you can not afford to pay. Frankly, like any other market trading, you must be prepared to lose all of the funds that you have set aside for trading. The various markets are very volatile and are constantly fluctuating. If you are interested in being a trader in this economic jungle, you might find yourself surprised and confused with the differing trends and patterns in the market.

Know Your Asset First

Getting to know the right stocks to trade is very critical and in doing so, it is very important that you understand how the company you are giving your investment to, makes a substantial amount of its money. Unless you have a good understanding of a company’s market, its products, as well as its competitive strengths and weaknesses, it would be pretty difficult for you to foresee whether or not your investment is going to be profitable. Also, when you trade in the currency markets you are not trading in actual stock certificates. With currency markets you are trading in the value of one currency against that of another. Both the stock certificates of a company and the values of a currency pair are known as the Asset or Investment Instrument.

Do Your Own Research

You should always do your own research and make your own decisions. DO NOT let anyone force you into making a decision that you don not want to make. Research is the key to success in the market trading world. Those that fail to research their Asset (the object of their trading) are doomed to lose everything.

Origins of Binary Options

When the British company dealing in financial derivatives and sports betting, IG Index, introduced binary options betting in 2003, investors found they could profit using the simplified betting system. Today, Binary Options betting are provided by IG Index’s associate company “Binary Bet.Com”; also known as “ExtraBet.” The Binary Options betting industry has adopted standard trading and investment terms to make them more appealing to the investment and financial community. Therefore, Binary Options are traded (bet) on Currency, Stocks, Indexes, or Commodities using many of the same terms associated with Stocks, Commodities, and Forex trading.

Simplified Trading

Binary Options have simplified trading quite a bit for the on-the-go investor where most trades are executed in 3 mouse clicks. No more agonizing over long term trends and in-depth financial analysis. With Binary Options, often called Digital Options, you are only dealing with a 1 hour time frame for the life of the transaction. Also, you are looking to determine if the price of that transaction will go Up or Down within that hour.

In reality, Binary Options do not have any physical product like Stock Certificates. Historically, Binary Options were limited for trading within the large trading firms and have most recently, within the last few years, been made available to the general public through on-line trading.

In Binary Options trading there are 4 simplistic steps to execute a trade:

You observe the chart of the Asset, the product you are dealing with, to determine if the current price will go up or will go down.
Next, you determine whether you want to make a CALL trade where you are expecting the current value of the Asset to go up or a PUT trade where you are expecting the current value of the Asset to go down.
Next, you press the Trade button when you feel the current price of the option is just right for your strategy of it going up or down.
Lastly, you can either take a break and come back at the end of the trading period or you can sit in front of the screen watching with a mixture of glee and frustration as the price of the trade moves up and down as it approaches the end of the trading period.

Watch for the next article on Binary Options, “Strategies of Binary Options Trading.” We will discuss how you can determine if the price is trending up for a CALL option or down for a PUT option.

Gregg Sterner is widely known in the Stock Market industry as The Rookie DayTrader. You can read more about the basics of stock and Forex trading at http://www.rookiedaytrader.com. Also, he has prepared a free report on the basics of Binary Options trading which you can get at http://bestbinaryoptionstrading.com.

Article Source:
http://EzineArticles.com/?expert=Gregg_Sterner

Find More Options Articles

, , , , ,

No comments yet.

Leave a Reply