Bitcoin Binary Options Trading For Idiots
Learning how to trade binary options with bitcoins is not a complicated as it looks. In fact, the very gist of this investment vehicle is to impart users with a straightforward and easy to grasp trading platform.
Binary options are simple option contracts that go with a fixed rate of risk and reward. This options contract was coined with the term binary due to its “one or the other” choice it presents and a “one or the other” payout upon the contract expires. These two choices typically involve up or down, or touch and no touch. These two will differ depending on the type of the binary option a user selects.
The way Bitcoin binary options work is similar to any other binary trading platform that utilizes fiat payments. Generally, everything stays the same except for the payment system employed, which in this case is cryptocurrency.
To execute a trade, investors must choose whether a certain underlying asset—currency pair, commodity, index, or stock—is going to rise or fall in value within a given amount of time. Essentially, users place investments on these predictions. In addition, what makes this type of trade more attractive is that the options are traded ON rather than IN the market. Hence, no actual assets are obtained physically, and these assets merely act as a basis for the fluctuations of their value.
Elements of Bitcoin Binary Options Trading
All binary options trading platforms have these three components that traders need to be aware of. These are expiry time, strike price, and payout.
Expiry time – is simply the length of time from the moment you purchase or call the option contract until it ends. This can be as short as 60 seconds up to a lengthy few months. Majority of traders enter these contracts for their abilities to yield profit in a short amount of time. However, long-term options are also provided should any trader prefer a longer time table for their contracts.
Strike price – is the value that you were able to enter the trade at, and it will be the basis whether or not your prediction tumbles in-the-money or out-of-the-money. For example, you purchase a certain option for $100, and you place a call prediction. If this value lands anywhere over the $100 mark, you receive a certain profit, if not, you lose the initial investment.
Payout offer – is the return that a binary broker presents to you. In the case of this investment vehicle, the values are always presented before the confirmation of a trade. This is one of the advantages of trading Bitcoin binary options, you never have to risk more than what you initially invested.
Ultimately, anyone can learn how to trade binary options as long as the right tools are equipped. Even beginners can win binary options. It is one or the other, simple as that, and it is hard to get it wrong most of the time.