Ways of trading and making substantial profit have changed significantly over the years. One unique way of trading is using the binary options, a fairly easy and less exhausting method as compared to, for example, the Forex and stock trading. Binary options trade entails speculating whether the value of an asset rises or drops.
Binary options trading has been made possible by the technological developments taking place in the modern world, making it easily accessible from basically anywhere.
Understanding the answers to the question of “how to trade binary options?” is essential to any individual keen on getting returns with less time loss and investment amount.
Requirements for Trading Binary Options
For one to be able to trade binary options, they have to be above 18 years of age with proof of identity to support this fact. While some knowledge regarding the financial situations around the world is not a must-know, having a basic understanding of how binary options are traded goes a long way in providing the trader with a rough idea of the options available.
Just like any other method of acquiring assets and making returns, binary options are associated with losses; therefore a trader ought to be prepared for a wine or loss. Fittingly, it is generally unwise to invest money set aside for important necessities such as food and other things such as health services in trading. It is advisable to set aside some money specifically for the trading.
Trading Binary Options
Buying of assets does not take place physically; rather, trade occurs via the internet. It is important to note that binary trading is only involves guessing what will happen to the value of an asset after a specified period of time expires which, signifies the end of a trading session. Another important thing to note is the technical terms used in the trade. For example the currency pairs, commodities, stocks, call and put, strike price, in the money, out the money and so forth.
Commodities refer to items such as coffee, gold or copper while stocks refer to the shares or portions of a company that traders buy. Call and put are the terms used to speculate the value of an asset. Choosing ‘call’ means the asset value rises while ‘put’ means a fall in value. It is however possible to win even if the value of an asset falls as long as one chooses the ‘put’ option. Strike price means the price at which one buys in the case of a call or sells for the ‘put’ option.
The expiry time has various options; one being the long term option that stretches to a day, a month or even an entire year. The speed option on the other hand varies from 30 to 300 seconds and is the gateway to a rapidly accumulating investment. A winning position is represented by the term ‘in the money’ and simply means one is winning money while ‘out the money’ means that a trader is losing.
Best way to learn how to trade binary options
The best place to get learn how to trade binary options a is IQOption for the following reasons:
- IQOption has a great academy offering you all the tutorials you need for starting to trade binary options
- IQOption offers you a free demo account with $1000 – no deposit required so you can experiment with what you learned.
- IQOption is the only binary option broker in the world where you can start trading with a min. deposit of $10 and invest as low as $1 per trade.
Here’s a quick video introduction on how to trade binary options using the IQOption trading platform:
Sign up for IQ Option’s free trading webinars, where you’ll find out how to analyze trends, choose a trading strategy, and personally answer any questions you may have!