If you're interested in trading financial markets with limited risk and profit potential, then binary options trading might be the right choice for you. In this article, we will discuss how binary options work and how you can make profits from them.

What are binary options?

Binary options trading is a form of financial instrument that offers only two potential outcomes upon contract expiration: a fixed payout or no payout at all. The term “binary” is used because there are only two possible results. Binary options are essentially a “yes or no” proposition, with traders speculating on whether an underlying asset will be priced above a specific amount at a specific time.

Due to its simplicity, binary options trading have garnered significant attraction to both an experienced options trader and those new to financial markets. However, traders must possess a thorough understanding of how binary options trading operates, the markets and timeframes it can be traded in, the benefits and drawbacks of these products, and which binary options brokers are authorized to provide financial services in the trader’s jurisdiction. With its instant liquidity and secure asset management, Finteria binary options trading platform provides Forex, Crypto, and Commodities instruments to trade.

How do options work?

As stated above, binary options trading is a form of investment where you need to answer if the price of an asset will go lower or higher to make a trade. Let's take an example: “Will the price of the crypto instrument BTC (Bitcoin) be higher between the 29th and 30th seconds?” If you think it will be, you place the ‘Higher’ trade in the books. But if you think it will be lower between that timeframe, then you place the ‘Lower' order on the platform.

The returns are based on profitability indicators that usually appear in the range of 50% to 90%. Therefore, the trade’s conclusion will be an initial investment amount summed with a product of initial investment and profitability rate. For example, if BTC/USD has an 85% profitability rate, and a trader places an order with $100, he will receive $185 when the contract expires. If the trader’s deal did not match the market movement in a given timeframe, he will have $0 as a result of this trade.

In the first case, where the trader received $185 in his trade, such a scenario is called being “in the money”. On the other hand, the latter case is called “out of the money”.

Pick your binary options market

Multiple asset classes are tradable via binary options. Trades can be placed on Forex pairs: EUR/USD, GBP/USD, USD/JPY, EUR/JPY, AUD/USD, USD/CAD, GBP/JPY, USD/CHF, EUR/GBP, and the full list is available on the Finteria binary options trading platform. Moreover, the platform offers commodity binary options related to the price of gold and silver. Finally, there are dozens of crypto positions to base around your binary options trading.

How to start binary options trading on Finteria

Finteria provides its own browser-based binary options trading platform which traders can access via demo account or live account. The trading platform provides real-time charts on TradingView along with direct market access to current binary option prices.

Hence, to access a grasp of binary options trading, it is common sense to practice with binary options Demo accounts first. As soon as you start to feel patterns of the binary options trading, you can top up your Live options trading account to close trades for the better financial portfolio.

Here are some basic strategies you can try on your binary options demo account:

●      Trend following strategy - This strategy involves identifying an asset's trend and placing trades based on the direction of the trend. You can use technical analysis tools like moving averages, trend lines, and indicators to identify the trend.

●      News trading strategy - This strategy involves trading based on news events that impact the asset's price. You can monitor economic calendars and news sources to identify upcoming events that may cause volatility in the markets.

●      Range trading strategy - This strategy involves trading in a range-bound market where the asset's price is moving within a specific range. You can use technical indicators like the Relative Strength Index (RSI) to identify overbought and oversold levels and place trades accordingly.

●      Breakout trading strategy - This strategy involves trading when the asset's price breaks out of a specific range. You can use technical indicators like the Bollinger Bands to identify when the price is about to break out of a range and place trades accordingly.

●      Martingale strategy - This strategy involves doubling your trade size after every loss, with the goal of recovering all your losses and making a profit. However, this strategy is risky, and you should use it with caution.

Benefits of Binary Options Trading

Binary options provide an excellent opportunity for traders to limit their risk and maximize their profits. Here are some of the advantages of trading binary options:

●      Capped Risk and Profit Potential: with binary options trading, you know your maximum risk and potential reward before making a trade.

●      Simplicity: trading binary options is straightforward, and you only need to decide if the price of an asset will go up or down.

●      Flexibility: binary options offer a range of assets to trade, including commodities, stocks, currencies, and indices.

To conclude, binary options trading is an excellent way to trade financial markets with limited risk and profit potential. By understanding how binary options work, you can maximize your profits and limit your losses. Remember to always trade within your means and only invest what you can afford to lose.