Binary Options – what are they?
In the world of investing, a potential investor has a wealth of resources, tools, and methods at his or her disposal. This was not always the case, but with the advent of the Internet and the advanced technologies and increasingly-sophisticated methods in use today, trading is more powerful than ever before.
One of the hottest trends in trading today is found with binary options – an exciting way to make money based on market movements. This form of options may seem exotic to some, and is not as commonplace as other methods of option trading, but it is quickly catching on, especially with online trading platforms.
What Are Binary Options?
An option is basically a contract between two (2) parties to buy or sell an asset at a certain price during a certain period of time. When it comes to currencies, an option is a contract to buy a particular currency at a particular price by a particular time, say, EUR at 1.3 USD before the option expires on January 30.
A binary option has two (2) possible outcomes: a fixed payout amount or nothing. Other names for these include all-or-nothing options and digital options, particularly in the forex option community.