BINARY OPTIONS : How it works?

Defined as financial instruments, binary options are used to speculate over a short period about the upward or downward development of securities. In general, this means speculating on currencies, but also on indexes, commodities, stocks or others. This category of financial options is also known as digital options, and has been a real success with investors, especially with individuals. On the market, the main brokers offer a large choice of binary options, so it isn’t always easy to choose, especially if you’re a beginner trader. This is why it’s important to really understand how these financial instruments work before starting.

Our trading software Gold Binary Robot automatically trades on options, so no prior knowledge is needed. But it could be worthwhile to know what it might give you. Like a guide, this article gives you interesting information about binary options by presenting how it works, its variants and its main advantages.

How binary options work

The success of binary options as financial instruments is due in part to how simply they work. By choosing this class of financial options, investors should simply be able to anticipate the development of the underlying security. Whenever the rate of the securities changes in the direction planned, the trader will pocket the amount defined in advance.

To put it simply, after choosing the value to be bet, the trader has to choose to wager up (this is called a “CALL”) or down (this is called “PUT”). With certain brokers, they can also choose the expiration time. If the bet is won, the trader will pocket the resulting gain (between 70 and 90% of the initial wager).

For example: a trader chooses to wager up on gold at a given time, with an expiration time of 60 seconds. He’ll wager €100 on this option. After 60 seconds (T+60s), if the trading rate for gold has increase, the trader will then pocket €90 – all in 60 SECONDS!

Binary options interface

However, it should be remembered that if the event the trader wagers on doesn’t happen, he’ll lose his wager. This is why high-yield financial options should be handed with caution to avoid unpleasant surprises. Many traders use technical indicators to help them make decisions. With our trading robot Bold Binary Robot, we correlate all high-performance indicators to get maximum gains.

Different types of binary options offered by brokers

Market brokers provide investors with a varied range of binary options. As a trader who has chosen these financial instruments, you can speculate on various securities with:

  • an “Asset or Nothing” binary option, which is known for being rarely used by investors. It is also characterized by an option price that isn’t random, but that remains variable during the operation.
  • a “Cash or Nothing” binary option, which is attractive because of how easy its functioning rules are. By choosing this type of financial instrument, you’re speculating on the base of an exercise price of the asset you choose. This exercise price ultimately corresponds to the price of the asset at the time the option is taken out. You can pocket gains by simply speculating on a probable rise or fall from this price.
  • a “One Touch” binary option, which is also easy to learn. Traders have to determine a specific value by which they’ll pass the trading rate for the asset during the lifespan of the option. And if before the end of the contract, the chosen value is reached by the rate, the option is made and the gain is won.
  • a “Double-One Touch” binary option, which works almost the same as the One Touch binary option except traders have to determine two values by which they have to pass the trading rate of the asset in order to validate it.

How to choose binary option brokers

For those who want to start speculating on binary options, the choice of a broker is a crucial step. You should keep in mind that some intermediaries operate illegally and you run the risk of losing your funds in the event of a dispute. This is why you should opt for regulated binary option brokers.

The brokers offered by our automatic trading robot Gold Binary Robot are among the most serious on the market, all regulated by the financial market authorities. If you want to become a high-earning trader without having to spend lots of time analyzing the financial markets, our robot will do all the work for you! Feel free to contact us if you have any questions.


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