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Month: January 2019

How to Trade Binary Options

Binary Options Trading

Trading Binary Options is very straightforward. A new trader can create an account, fund it and complete his first trade in less than 3 minutes.

STEP 1:Create and fund your Beast Options trading account. You will be asked for basic personal information and then be prompted to head to the secure banking window to fund your account.

STEP 2:  Choose what type of trade (Digital, Range, Touch), the asset class (Currency, Stock, Commodities, Indices) and the actual asset (EUR/USD, Gold, Facebook Stock). For your first trade, it’s best to choose an asset and asset class that you are familiar with.

STEP 3: Select the Expire Time (when the option ends).

STEP 4: 
Decide if the underlying asset will move up or down in value, and chose Call or Put respectively.

STEP 6Choose an amount to invest. 

You may initiate as many commission-free trades as you like and monitor your trades via the Open Trades Dashboard.

Trading Tools 

There are two very important tools available to Beast Options traders – “Close Now” and “Roll Over”. Be sure to get to know these tools and identify when to use them while trading.

Close Now 

The Close Now trading tool enables a trader to cancel a Digital Option before the time of expiration. The perfect time to use this tool is when the trader is currently in the money, but believes that the value of the underlying asset he purchased is going to expire at a value that is outside of the money.

For example, a trader buys a one-hour Call option. After 50 minutes he sees that the price of the underlying asset is beginning to fall after having risen for a while. If trader were to “Close Now,” he would insure that he makes a profit. On the other hand, if the price of the option has decreased steadily, he could “Close Now” to cut his losses.

Roll Over 

The Roll Over trading tool enables traders to extend the expiration date and or time of an option to give said option a greater chance to expire in the money.

For example, a trader purchases a one-hour Call option. During the first 55 minutes of the option, the price did not perform as expected. Nevertheless, in the final 5 minutes the value starts to move in the direction the trader had hoped. For a one-time fee, the trader could extend the time of expiration to allow the option to finish in the money.

Anatomy of a Trade

Every binary options trade is based on three essential elements – the underlying asset, the binary options contract and the forecast or prediction.

The Underlying Asset 

Beast Options trading platform offers binary options on a range of underlying assets including stocks, commodities, currencies pairs and indices. Traders generally become more familiar with a specific underlying asset or area of the market and become specialists in trading those assets.

The Binary Options Contract

Binary options contracts typically last anywhere from one hour to one month, but Beast Options offers traders the ability to buy contracts that are as short as one minute. To make accurate predictions, it is important to know exactly how much time is left before an option expires.

The Forecast or Prediction 

The job of a trader or investor is to determine which direction the price of an underlying asset will move before the option’s time of expiration. Traders who believe that an asset price will rise should buy a Call option. Traders who believe that an asset price will fall should buy a Put option. Correct predictions can earn traders high returns that nearly double their investments.

What Are Binary Options

Binary Options involve predicting the price movement of an underlying asset over a certain time period. Binary Options provide access to stocks, indices, commodities and foreign exchange. The options can also be called a fixed-return option.

If a trader wagers correctly on the direction of the market, and the price at the time of expiry is correct, the trader is paid a fixed return. A trader should select the asset class(es) with which he feels most comfortable and knowledgeable.

Since there’s no commission or spread involved, trading does not involve the purchase of any underlying assets and the profit from your trade is available immediately.

As with most types of trading and investing, Binary Options traders will come across a basic trading vocabulary that appears in our glossary. We suggest you become familiar with the basic terminology before you begin trading.

Binary Options, or Digital Options, are usually traded OTC across all assets in financial markets, but are more commonly used within the Forex and Interest markets. Numerous stock exchanges have recently produced listed Digital Options on selected stocks, commonly known as FRO (fixed return options). Today the CBOE offers fixed return options on S&P500 and VIX. Moreover, 20 stocks were listed on the AMEX in 2008.

Advantages of Trading Binary Options
Simplicity – All a trader needs to do is choose the direction they think the value of an asset is going to go within a set amount of time. For example – Will the Facebook stock price increase or decrease by the time the option expires?

In order for a trader to be “in-the-money,” a winning trade only needs to expire a single pip in the right direction or touch the range of the chosen option.

Controlled Risk
The upside and downside is known before you trade, unlike other methods of trading assets the risk and reward are predetermined allowing to control your exposure. 

Hedging Opportunities
This is a safer option to take if a trader has an open position elsewhere in currency, stocks etc. 

Excitement and opportunity
Binary contracts are being issued around the clock, allowing traders to trade on multiple timeframes. There is always an expiration time arriving, which constantly yields new opportunities for binary traders. With options lengths as short as 60 seconds, trading binary options can be the most entertaining method of trading assets.