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What exactly are Binary Options?

There are lots of ways to invest your money. Binary options are just one of them, but lead to many questions. After all, the name doesn’t seem to give away what they are.

When you think about the name, it really does tell you a lot. Binary has just two options: 0 and 1. Binary options have just two options: put and call. It really isn’t that complicated and is often viewed as one of the safest options when investing money.

How Does Binary Options Work?

The investment is one a particular asset. This can be on a currency or specific type of asset, including gold, silver and even fossil fuels. You put the amount down that you want to invest and it works very similar to the stock market. You watch as it goes up and down.

The difference is that you have to decide whether it will go up or down. If you believe it will go up, then you call on the investment. When you believe it will fall in price, you put the option. If you are right when it comes to the end of the time frame that you’ve selected, you get your investment plus extra.

The time frame you have for your options is up to you. Some people choose just hours, while others will select days or weeks. The smaller time frames are great for those more temperamental assets and currencies, while the longer ones are great for those that are on a promising rise or fall.

What Happens If You Lose?

In many cases, if you pick the wrong option you will lose your investment. However, it depends on the trading software. Binary options have various trading programs that you can choose from. Some of them will allow you to get a small amount of your investment back. However, this is not always guaranteed.

It is important to check the trading platform before you start. Find out your options and the percentage of your original investment that you get back if you choose the wrong option.

Learning Binary Trading

It takes time to learn binary trading. The good news is most of the trading platforms give you dummy options. These are like demo programs, where you get to trial binary options trading without spending any of your own money. However, you will not get any money either. It really is just the chance to try out different strategies and understand the nature, while testing your knowledge of the different assets.

Take your time to learn the different strategies. This will certainly set you up for the future. An introduction to binary options series is worth investing in. You will soon start making your money back when you start seeing success.

Binary options really limit your options for an investment. This is a great option for those who want to get into investments without all the hassle of learning how to manage the stock market. There is a lower risk, without the extremely low return on investment.

About Stephanie

Stephanie Rosen is a financial market analyst and a blogger. She writes about stock market and investment opportunities around the world. You can find her latest ideas on here. Just signup our news letter today and receive regular updates of Stephanie.