How much money can you make trading Binary Options?
Who doesn’t like to make some extra quick money? And binary options trading makes it possible. Through this trading, you can make real money very fast, but too much risk is involved. But if you are nervy enough to take the risk, then binary trading is just the thing for you . You can make loads of profit using this method, but before getting into the profit part, you must first understand the intricacies of trading binary options.
What you will read in this Post.
What are binary options?
Binary options are a form of options trading that is based on a single question, “did a stock index commodity or Forex pair end up over a specific price or not by a defined period of the expiration”. There are many definitions of binary options trading present online, but you must understand the term’s meaning rather than just reading the definition.
It can be a little challenging to understand the concept initially, but let me explain this to you in simple words. Trading binary options mean that the trader or investor will have to postulate whether the price of an asset will go up or down after a certain period, and based on his speculation , he gets the money. And the price of assets includes assets such as the stock price of companies, the price of cryptocurrencies, the USD/GBP exchange rate, the price of gold or silver, etc.
USDGBP Chart by TradingView.
The period can be as short as a minute; this means that the trader would have to speculate whether the price of a specific asset would increase or decrease after a minute. Thus, a person can trade binary options hundreds of times per day in global markets.
Why you should trade binary options? The main thing that has attracted traders to binary trading is that they predict only precisely how much they can gain and what they will lose. Usually, the profit percentage is 70-95% of what is invested . For example, if you invest $100 and your speculation about the asset price was right, you will get $170-$195 . This makes trading simpler. There are only two options at the end of this. Either you gain it all or lose it all. That is why it is called the binary option.
Best binary broker:
(Risk warning: Trading is risky)
Quotex – Trade with high profits.
1 2 3 4 5 5.0 / 5.
Quotex – Trade with high profits.
Accepts international clients Min. deposit $10 $10,000 demo Professional platform High profit up to 95% (in case of a correct prediction) Fast withdrawals.
(Risk warning: Trading is risky)
Binary Option types for making money.
The most common type of trading in binary option is the Up/Down trade, but there are other types. Let us know about them:
This is the most common type of binary option. In this option, the trader predicts whether the asset price will go higher or lower than the current price of the asset after the expiration time.
In this type of option, traders have to predict whether the price of that asset will be up or remain below the high figure or low figure.
This is the most exciting category. This category has set levels higher or lower than the current actual price of the asset. Traders have to predict whether the asset’s actual price will touch the level at any point before the expiration time. And if the price touches that point, the trading gets over at that time itself, and the trader gets payout immediately at that time.
This option is very similar to the Up/Down trade , but instead of using the current price of the asset, the ladder uses different price levels.
Binary Options explained with examples: duration, profit, and losses.
Trade duration.
The benefit of investing in binary options is you have a number of choices. One of the most extensive choices is time (duration).
The duration most probably ranges a little over 60 seconds . Thus, you will need to check with the broker about the minimum and maximum duration. However, the most common duration is 10-60 minutes.
Profit and losses.
Consider this question: Will the price of bitcoin be above $39,243 today at 5:00 P.M? If, according to your research, you think that yes it would be, then you should buy the binary option, and if you think the contrary, you should sell your binary option .
The price of binary options ranges between $0- $100. Now imagine that the binary for the above asset is trading at $52.50 (bid) and $55.50(offer).
If you buy and trade bitcoin as a binary option, then you have to pay $55.50 , and if you sell, then you’ll sell at $52.50. Now let’s assume that you predict that the price of bitcoin would be above $39,243, and thus, you decide to buy the binary option at $55.50. If now, after 5p.m, the price of bitcoin goes above $39,243, your prediction was correct, and the binary option you bought at $55.5 would become $100. This would make your binary profit $100-$55.5=$44.5 .
But if the bitcoin price goes below $39,243, then your option expires at $0, and you lose all the money you had invested. (The price of the binary options given here was excluding the fees, remember that you will have to pay the broker’s fees while doing binary trading.)
At the end of binary trading, every option closes at either $100 or $0. If your prediction is accurate, then your money will become $100, and if it’s false, then you will get $0. This means that the maximum amount you can get from a single binary option is $100 . So, imagine the number of $100 you can make in a day if you trade even for five-six hours. To make money through trading binary options is like counting stars. It’s endless. But there is a high risk involved in this kind of trading.
How to trade binary options?
The first thing you need to do is choose the correct broker for trading binary options. You can do this by comparing all the website reviews and choosing the best option for yourself. Try to choose a website that charges minimum fees and gives fast services.
The asset list for binary trading is enormous, but you should select the area where you have prior experience or have deep knowledge because your money would be at stake. There are many options available in the market for binary trading. These include forex, cryptocurrency, indices, commodity, stocks, etc. For example, the stock price of Google, the price of oil, and Ethereum, all of such assets come under this list.
You must set a certain amount for trading in binary options because your total investment is at risk, so it is better to start with a small number of binary options. Later you can increase the number of binary options you buy based on the experience you gain.
When you start binary options trading, you will find an option to select the expiry time of the asset, and you can select from intraday, daily, or weekly. Intraday options would be best for day traders who can give the maximum time of their trading, and it is the most profitable option. Intraday traders can do several trades in a single day and earn profits . Daily options expire at the end of the day , which is also beneficial for day traders. Lastly, the k option also expires at the end of the trading week and can be suitable for swing traders.