Binary options

Binary options are a financial instrument that has become popular among investors in recent years. By purchasing a binary option, an investor attempts to predict whether the price of a given asset will rise or fall in the future. They are called binary options because they only have two possible outcomes: either the investor predicted correctly (in which case their capital increases), or if they are wrong, they lose their entire capital.

 

What are binary options?

Binary options are a financial instrument that allows you to predict the price movements of various assets. They are a financial instrument that allows for the rapid accumulation of capital, but they also carry a very high degree of risk.

Are binary options legal?

Binary options are legal, but due to the very high risk involved in trading these options (it is easy to lose all invested capital), the European Union and individual member states are regularly working on regulations that may make binary options illegal or much more regulated.

What are the types of binary options?

In the basic version we have 4 types of binary options to choose from:

• High / Low – the most popular type of option where the investor “bets” on whether the price of the asset will be higher or lower than at the time of purchasing the option
• Boundary – the investor predicts whether the asset’s price at maturity will be within a specific range
• Touch/No touch – the investor predicts whether the asset price will reach a certain level
• Short-term – binary options with a maturity period of 5 seconds to 5 minutes.

Can you make money on binary options?

Binary options are a financial instrument that many people want to make money on. This instrument is particularly appealing to beginner investors, who find it incredibly simple. Unfortunately, in practice, making money with binary options is much more complicated. Typically, the accuracy of predicting price movements for beginner investors doesn’t exceed 50% (meaning it’s essentially random). Furthermore, in the case of binary options, broker commissions are exceptionally high, quickly eroding any potential profits.

How to trade binary options?

To start trading binary options, the easiest way is to open an account with one of the popular brokers. Binary options are relatively easy to understand due to their structure. Therefore, at least from a technical perspective, they shouldn’t pose any problems even for beginners. Furthermore, the best brokers offer appropriate tools and tutorials to help you understand how these options work.