Binary options have gained popularity over a period of time. The trader makes a bet on particular security after assessing the price movement. The base of binary options is cash settlement at the expiry of the option. Binary options offer the trader a fixed amount for a fixed time. Many brokers and trading robots provide binary options signals to the trader.
Features of binary options
- Sell: At the current time the most effective feature of binary options is sell which is also known as buying me out. This feature allows the trade to sell the open trade back to the broker. The trader may sell the open trade at a profit if the position is in the money. When the position stands at out the money, the trader must sell the open trade at less amount to reduce the extent of the loss.
- Rollover: Under this feature, the trader gets the opportunity to extend the trade to the next expiry date. It should be used when the trader is sure that the price will move as predicted, but it will take extra time.
- Double up: It is used to replicate the position of the trade if it appears to be profitable. The entry of this trade is made on the current entry price and not the price of the original trade.
Advantages of trading in binary options
- High return: As binary options come with higher risk, they even provide the trader with higher returns. It completely suits the term “high risk, high return.”
- Fixed risk: The trader has the upfront knowledge of the risk that they are undertaking. The amount chosen by the trader is the only amount at stake. There is no risk of any leverage costing.
- Easy to trade: Many new beginners are also trading in binary options. There are many online sites that guide the traders about trading in binary options and are user-friendly.