The financial option you get when you enter a kind of deal can be either a fixed amount of money or nothing. This kind of financial option guarantees you a return of some fixed amount of money or nothing at all at the end of the deal. This option is used for mainly theoretical purposes to make the building blocks for financial derivatives of the asset pricing, but sometimes this option is used by some markets to make a scam. Basically this kind of financial options run on the false assurance that you shall have your money back if the option expires within the time else you shall have nothing. This theory is also applied for measuring the risk factors, if neutral or not during the distribution of the asset pricing.
The option that has been discussed in the above paragraph where either you get all or nothing is used largely in markets while measuring and calculating interest. This kind of financial option is known as ‘all or nothing option’ or more commonly known as ‘Binary Option’. This all or nothing option is used in the trade markets, mainly when the trades are carried online. But at the same time as also mentioned above, this theory when applied can lead to frauds or scams. For example in a marketing trade business, the brokers are often in this deal where the customers bet against the broker as there is no money in real for the service of brokerage for the broker. Here often price of the item and other information is changed or manipulated which lead to the loss of the customers. One even can’t take himself or herself out in the middle of the deal as such things are not allowed in this kind of a deal.
What are the few basic guidelines that a trader should know about the Binary Options?
- One should keep in mind how do the Binary Options work and what are the probable chances of losses or fraud that can happen. For example, after an investor buys his or her item from the market investing on it earlier, he or she might wish to sell it back to the market. If the value of the same asset increases when the person makes a profit, the person shall be running at the loss if the same falls down monetarily in the market value.
- One should constantly think about the ‘call’ or ‘put’ options. The possibility here when the price of the item increases in the market, then you term it a ‘call’ as you are about to make a market when you sell your item. You mention it to be a ‘put’ option when you can guess or predict that the value of the item is falling down in the market and if you sell you shall face a loss.
- The few of the items that can be traded in this kind of option are stocks, commodities, indices and forex.
- Finally you should learn how to trade in a market using this option from experienced sources and people.
- Last but not the least you should never try and gamble in your trade when it involves this kind of all or nothing option.
The steps to carry out in a trade using binary options
There is a very easy and strong reason why such kind of option is very famous. The reason behind opciones binarias being used so frequently is because the trader has to think of only two possible options, whether it will be a loss or a profit. The other complexities of the trade here can be less noticed about. As mentioned earlier; the ‘call’ or ‘put’ option is supposed to be in mind. This prediction will help you make a profitable trade. The other thing to keep in mind is to choose the correct broker. Each and every broker related to the kind of item you are investing in will have all kinds of accounts but you should invest in the account where you can gain the maximum. You should also keep in mind the time of expiry of the deal so that you don’t endure a loss.