Compared to buying stocks, binary options is a popular trading choice for investors nowadays. Different from stocks, binary options trading only requires your prediction as to whether the stock or invested asset will rise or fall during a set time period. But prediction isn’t necessarily easy and it’s not just a gamble. It requires expertise on various factors affecting the increase-decrease of the value.
How can you earn from binary options? If the asset goes in the direction you predicted, over the time period specified, your investment pays out. If it doesn’t, you lose the money you invested. The term ‘binary’ refers to any system that only has two options. In the case of binary options, you either profit on your full investment, or you lose your full investment. While this may sound risky at first, it is actually quite a predictable investment strategy because you know exactly how much you could gain or lose on any option. But with some brokers, a small percentage of your invested capital will be given back even if you lose the trade.
Due in large part to their simplicity and the fact that you always know all the risks and payoffs ahead of time, binary option has become very popular. However, to become successful in this field, a major factor to consider is finding the best binary option broker or platform. Working with your chosen binary options broker, you will identify which asset you want to buy an option on, how much you want to invest and when the option will expire. Once the option is placed, you simply watch the trading activity on that asset to see if your prediction was correct or not.
When comparing platforms, there are certain factors you have to take into account while choosing the best broker for you.
A broker that offers an easy sign up process is good. You don’t want to spend large amounts of time due to complex registration to get your account up and running.
You should also pay close attention to the payment methods supported by the broker. Many binary options traders are based in countries where certain payments are either unsupported, or not allowed. Make sure that the binary options broker you’ve chosen will give you the opportunity to deposit/withdraw money via a payment method that is valid in your area.
Finally, you definitely want to check out online reviews of the broker you’ve chosen in order to find out whether the company is reliable or not. Do your due diligence before handing over your money.