Binary Options has become a popular investing strategy over the last year or so. That’s because of the fast paced nature of Binary Options and the ability to earn money quickly.
However, that doesn’t mean trading binary options is for everyone. Before you dive in let’s look at some basics of how it all works and how you can get started.
Binary Options Basics
In a nutshell binary options is a form of financial betting. You choose an asset (which could be stocks, commodities, or even an index) and then you guess whether you think that asset will go up or down.
Once you’ve decided on that you put up money as well as an expiry date.
For example, let’s say you think stock XYZ will go up in value a certain percentage by tomorrow. You’ll then place your trade betting your desired amount along with your expiry date of tomorrow. If you win you could stand to gain a lot of money (this will largely depend on the amount of money you put up.) If your “trade” was wrong you could lose everything you put up.
Before you jump into trading binary options I would highly suggest that you first start with a demo. A demo is a free account that allows you to use fake money to place your wagers. After you get used to that you can then begin to look for a brokerage.
Choosing a Binary Options Brokerage
After you understand all the rules and have practiced with a demo account you can then look for a brokerage to trade with. Not all brokerages are created equal so it’s important you take the time to pick the right brokerage to suit your needs.
Here are some things you can look for:
- Regulations – Because of regulations some brokerages can offer higher leverage than others. (Leverage is basically like a loan a broker gives you.) There’s no right or wrong when it comes to choosing because of leverage – it depends on what you’re comfortable with in the first place.
- The Company’s Financials – You obviously don’t want to place a lot of money in a company that might go bankrupt.
- Trading Platform – This is another characteristic that is based purely on personal preference. Some trading platforms will be easier for you to use than others, some may offer mobile trading, etc.
- Payouts and Assets Offered
Before you get into binary options trading take your time and make sure you fully understand what you’re doing. Since there are so many different options it might take you awhile to find your groove.
Start with a demo account and work from there!