What You Should Know About Binary Options

Recently, I was hired to help build content for a binary options startup site. As a matter of fact, this has been my first week doing so. As I’ve been writing the different pieces of content, I’ve come across some pretty interesting things. So, today I figured I would share with you the different things that I’ve learned while working with them.

What Are Binary Options

Before we get to what I’ve learned about binary options, I think it’s important that we talk a bit about what they are. Binary options are investment vehicles. However, unlike most investment vehicles, there are only 2 possible outcomes. Either you win, or you lose. Hence the term “binary” in the name binary options. There are a few different types of binary options, but we’ll go over those in more detail later.

Aren’t Binary Options Broker Shady

Well, that was the first thing I wanted to share. One of the larger aspects of the content writing gig that I’ve been hired for is doing reviews of binary options brokers. What I’ve found is that often times, the broker sets the price of the asset. So, if they wanted to win every time, they would set the price in their favor. I’ve also found that there have been a few options out there like Banc De Binary that have been in a lot of trouble for doing exactly that.

The good news however is that not all binary options brokers are shady. I’ve come across several great brokers that offer several great services. The key when choosing a binary options broker is to make sure that you do your research on the brokers that are interesting to you before signing up.

How Do Binary Options Trades Work?

When it comes to binary options, there are 3 basic types. Here’s what they are and how they work…

  1. High/Low Options – High/low options are your most basic form of binary options. With these trades, you’re betting that the price of an underlying asset will either go up or down over a specified period of time. If the expiry date comes, and you were right, you get paid! If not, you lose your money.
  2. Range Options – These are pretty interesting options. With range options, you bet on 2 prices, a high and a low. The bet is that the asset price will not fall below your low bet or rise above your high bet. As long as it stays in the range, you’re in the money!
  3. OneTouch Options – OneTouch options are my favorite types of options. With these options you’re betting that the price of an asset will reach the strike price, but once it does, it doesn’t matter if it stays there. The value of the asset only has to reach the strike once.

Notice The Use Of The Word Bet?

The bottom line is that binary options are a bet. They’re investment vehicles, but they’re also a form of gambling. So, if you like poker, betting on your favorite team, or betting on anything else, chances are, you’ll love the gamble associated with binary options.

Knowing that binary options are gambling however, it’s important that investors use them differently. With this type of investment, you’re not investing for the long haul. As a matter of fact, things move pretty quickly. So, this isn’t a good retirement investment vehicle. To tell the truth, I believe that binary options are more a fun way to gamble with better chances than the casino. So, don’t go betting with money that you can’t afford to lose!

Reader Question

Have you ever tried your hand in the binary options market? If so, how’d it go? If not, do you plan to one day?

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