23 November 2017
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What Are Binary Options?

What Are Binary Options?


Binary options are trading options that belong to the exotic type options. They are a great financial tool that requires a trader to only predict the direction of the price (either up or down)of a preferred asset (shares of stock, currency or commodity such as oil) at a designated time in order to get a fixed return for an investment made.

 

If the trader makes the right prediction at expiration time, he or she receives a pre-determined payoff as return for his/her investment. It the prediction is not correct, the trader loses the amount he or she invested and he/she won’t be entitled to any payoff. Binary options are one of the simplest types of trading options in the current market simply because it allows the trader to know exactly what he stands to gain or lose.