Binary options is a category of trading that involves traders trading with an online broker. In the process, a trader purchases a contract with two possible outcomes. One being in-the-money and the other being out-of-the-money. These two outcomes are determined by the trader correctly predicting which direction (higher or lower) the underlying asset will expire. In the past, a binary options contract was very complex, being traded Over the Counter (OTC) in an illiquid, unregulated market.
More recently, binary options have become a transparent form of options trading. Binary options is also referred to as digital or fixed return options trading. These fixed return options are accessible to all trading levels: beginners and advanced traders. Since 2011, binary options are traded 24/7 in any market. This has given the industry an edge which will be difficult to overcome. The positive aspect for traders is that they have many more options, being able to trade whenever and wherever it suits them!
You now have the ability to greatly multiply your invest with minimal risks. Not only that, you can invest in a variety of stocks, currency pairs or commodities. This allows you to pick your market and risk level, thereby maximizing your profit potential. Little previous knowledge of the financial market is required in order to begin trading binary options. That being said, it is recommended that you do your market research to increase the possibility of success.
There are diverse binary options trading platform for you to choose, making you spoils for choice. You will have to get to grips with the basics of binary options, which will take you no time. Once you understand the market, you will know what to look for with a trading platform and the advantages you can reap!