Binary Options Basics | Binary Options Tutorial

Okay, so you're probably wondering what Binary Options are. Binary Options are a relatively new type of financial instrument that can be traded. Let's break things down really simply for this first lesson but don't get too comfortable, things will steadily get trickier as you progress through these tutorials. So first let's break each word down. “Binary” refers to the essential duality of Binary Options, as in these trades only factor in two parameters, up and down.  When trading these financial instruments you're only looking to predict whether an asset (stock, currency, commodity, index) will rise by the end of the trade or fall. Simple as that. Now as far as “Options” goes: in the financial market options are what are known as derivative instruments. Derivatives are basically  instruments that are based on the performance of an underlying asset. So Binary Options are derivative financial instruments based on the performance of underlying assets, and traders speculate on whether they will rise in value or fall.

 

You're still with me right? When trading these instruments you can either purchase a “Call Option” if you think the asset will go up, or a “Put Option” if you think the option will go down. As far as the four classes of asset you can trade on generally people have a slightly better understanding of Currencies and how they work so for beginners this is a particularly good place to start. Also bear in mind that the underlying asset you have chosen to trade determines when you will be trading. So, for example, if you are trading U.S stocks, you'll be trading when the New York Stock Exchange is open for business, or 9:30pm – 4:00pm EST. This is actually another good reason to kick-off with Currencies (or Forex), as they are pretty much open 24/5. From 5:00pm EST on Sunday to 5:00pm EST on Friday.

  • Share this post!
Posted by

George Milios

George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.

Binary options withdrawing funds - Broker Investigator

Binary options withdrawing funds - Broker Investigator

Perhaps the most common problem encountered by traders of online retail binary options and the topic on which we receive the most complaints by readers here at binaryoptionswire.com is the topic of withdrawing funds or profits from one’s account. In theory, most brokers claim that the wit...…

Published: Thursday 29 October, 2015

Common Obstacles to Success With Binary Options

Common Obstacles to Success With Binary Options

Any trader that enters the online retail binary options world does so in the sincere hope of success that will bring in profits from the good trades he/she will manage to implement. Anyone arguing that this is a simple and linear process that merely implies …

Published: Thursday 29 October, 2015

Rebranding Binary Options Trading

Rebranding Binary Options Trading

Ever since their inception, about six years ago, binary options have been the centre of much controversy especially around whether they are …

Published: Thursday 29 October, 2015

Why Most Binary Options Signals Providers Shouldn’t Be Trusted

Why Most Binary Options Signals Providers Shouldn’t Be Trusted

It is a natural tendency for human nature to be attempting to make money by taking advantage of the experience and expertise of someone else. This is why many binary options traders, especially those who are new to online trading altogether, choose not to learn to read charts and monitor the mark...…

Published: Thursday 29 October, 2015