http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
Learn To Trade Binary Options
An interesting and potentially very profitable type of online options trading is the binary option.
Learn to trade binary options and you gain if you correctly anticipate the market lose no more than the price of the option if your analysis turns out to be incorrect.
Learn to trade binary options and not only is trading somewhat simpler but it can be a lot more profitable as well.
But, before looking at binary options, just what are options in general?
The Options Market
An options market is a place in which a buyer and a seller agree to a contract for a future transaction at a set price.
In the options market of today trading is typically online and happens with the support of a clearing house that takes away the risk on non-compliance.
Options are bought and sold on stocks, commodities futures, and currencies. The two basic tools of options trading are calls and puts.
Buying a call gives the buyer the right to purchase the equity in question at a set price, called the contract or strike price, no matter how much higher the price may go.
A put gives the buyer the right to sell the equity in question at the strike price.
In each case the buyer of the option is under no obligation to execute the contract and will only do so if profitable.
Sellers of calls and puts are obligated to fulfill the contract if called upon to do so.
Over the long run selling options is more profitable than buying them.
But, one bad trade can be very expensive, so most selling (writing) of options is done by large institutional investors with very deep pockets.
How to trade stock options can be with binaries as well as regular trading.
A profitable option trade in regular options trading yields the difference between the strike price and the current price of the equity.
This is different from binary options and it is important to learn to trade binary options with this simple fact in mind.
Learn to Trade Binary Options
Binary options are of two sorts.
One is called “cash or nothing” and the other is called “asset or nothing.”
An “in the money “ option in regular options trading is an options contract that has some value, even if that value is one cent.
An “in the money” binary options contract is one that is worth a fixed amount of money or the value of the underlying equity.
There is no in between value.
Naïve traders may look at binary options and see the “all or nothing” aspect of binaries as a simple way to trade.
Actually, binaries are complex in that the difference between making a profit and walking away with a hard learned lesson may be one cent in the value of the equity on a given day at a given time.
Traders who learn to trade binary options must know how to do both fundamental and technical analysis of the underlying equity on which the options contract is based.
3. By www.Options-Trading-Education.com
An interesting and potentially very profitable
type of online options trading is the binary
option.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
4. Learn to trade binary options and you gain if
you correctly anticipate the market lose no
more than the price of the option if your
analysis turns out to be incorrect.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
5. Learn to trade binary options and not only
is trading somewhat simpler but it can be
a lot more profitable as well.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
6. But, before looking at binary options, just
what are options in general?
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
8. An options market is a place in which a buyer
and a seller agree to a contract for a future
transaction at a set price.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
9. In the options market of today trading is
typically online and happens with the support
of a clearing house that takes away the risk
on non-compliance.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
10. Options are bought and sold on stocks,
commodities futures, and currencies. The two
basic tools of options trading are calls and
puts.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
11. Buying a call gives the buyer the right to
purchase the equity in question at a set price,
called the contract or strike price, no matter
how much higher the price may go.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
12. A put gives the buyer the right to sell the
equity in question at the strike price.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
13. In each case the buyer of the option is under
no obligation to execute the contract and will
only do so if profitable.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
14. Sellers of calls and puts are obligated to fulfill
the contract if called upon to do so.
Over the long run selling options is more
profitable than buying them.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
15. But, one bad trade can be very expensive, so
most selling (writing) of options is done by
large institutional investors with very deep
pockets.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
16. How to trade stock options can be with
binaries as well as regular trading.
17. A profitable option trade in regular options
trading yields the difference between the
strike price and the current price of the
equity.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
18. This is different from binary options and it is
important to learn to trade binary options with
this simple fact in mind.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
20. Binary options are of two sorts.
One is called “cash or nothing” and the other
is called “asset or nothing.”
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
21. An “in the money “ option in regular options
trading is an options contract that has some
value, even if that value is one cent.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
22. An “in the money” binary options contract is
one that is worth a fixed amount of money or
the value of the underlying equity.
There is no in between value.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
23. Naïve traders may look at binary options and
see the “all or nothing” aspect of binaries as
a simple way to trade.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
24. Actually, binaries are complex in that the
difference between making a profit and
walking away with a hard learned lesson may
be one cent in the value of the equity on a
given day at a given time.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
25. Traders who learn to trade binary options
must know how to do both fundamental and
technical analysis of the underlying equity on
which the options contract is based.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
26. An advantage that many traders see and why
they learn to trade binary options is that they
can enter the market for a brief moment and
gain a substantial return
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
27. providing that they correctly anticipate the
price of the underlying equity at contract
expiration.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
28. Many otherwise profitable options
strategies do not apply to binary options
trading.
http://www.options-trading-education.com/6591/learn-to-trade-binary-options/
29. For more insights and useful information
about options and options trading, visit
www.Options-Trading-Education.com.
http://www.options-trading-education.com/6591/learn-to-trade-binary-
options/
