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What is binary options trading?

Question by Sydney Mulunda On 18 March 2020, 19:41:32


Please write a genuine and meaningful answer to get a good ranking.

Answer by Sydney Mulunda On 18 March 2020, 19:49:12

Binary options trading can either be referred to as digital options or fixed return options. In binary options trading the payoff is usually either a fixed predetermined amount or nothing at all. The most common binary option is the high-low binary option where a trader burs a binary call option if he thinks the price of the underlying asset will go up above the current market price or buys a binary put option if he thinks that the price of the underlying asset will go down below the current market price. If the trader does a correct assetssment, they will get a payout which is usually 70 to 80% of the initial  investment put. Otherwise the trader loses his initial investment. Therefore, binary options trading is very risky because one can either lose their investment in a second or gain a fortune within the same second. 





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