Binary options: a way to make money or lose money?
Let’s get acquainted with Binary Options – an interesting opportunity to make huge money on almost any financial instrument. In the article we will analyze the essence of options: what is it really like – truth or quackery.
What is a binary option?
The principle of options is somewhat reminiscent of roulette when a player bets on red or black. You make an assumption of any kind, for example, whether the price touches a certain level or not, whether the dollar will cost less than the current value in an hour or not. Then you buy an option. If, after a predetermined time has passed, your forecast is correct, you will make a profit, if not, you will lose the money that was invested in option.
Thus, it does not matter to the trader how much the price will increase or decrease, the emphasis is on the correctness / fallacy of the forecast. The expiration of time and the “debriefing” is called the “date of expiration.”
Possible income is expressed as a percentage, therefore, you will receive the more money, the more you buy a contract. If the income from the option is 60%, then buying it for $ 10, you will get $ 6; if you buy for $ 1000, you will earn $ 600. The option price is called a “premium” (do not confuse, this is not profit).
Important! A binary option is a contract that obliges one side to pay a certain amount of money to the other side if its [second side] financial forecast is justified after a predetermined period (by the date of expiration). If the forecast does not materialize, the other side loses the amount equal to the value of the option (premium).
The amount of income from an option contract is 60-80 percent of its value, but there are also deals that yield a profit of one hundred percent (the more complicated the forecast and the higher the risk, the greater the profit).
Binary options: a way to make money or to lose?
Separately, it must be emphasized that Binary Options is a completely legal way to make money in the financial market. It is important to understand the essence, as well as choose the right tactics and the right place to trade, because as with any financial exchange, you can stumble upon scammers.