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Understanding Binary Options

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By Author: Red Alvarez
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What are binary options?
Binary options, as the name indicates, has two potential results:
1. The price of the underlying asset closes either above or below the defined price at the fixed time. It can be described as one of the simplest financial assets.
2. Based on a “yes” or “no” scheme, it enables a person to trade, although the risk and the potential income, are capped.

Advantages to binary options trading
• The risk and reward can be recognized in advance, or when a deal is closed.
• Binary options terminate quickly and can make huge profits with a less fast, successful trades.
The expiry time could extend from 15 minutes up to a week or two.
• Investments could start at $10.
• Binary options grant the possibility to trade with an extensive range of assets available worldwide.

Disadvantages of binary options trading
• Some binary options broker may not be well-regulated, and you might encounter the risk of losing money if your broker decides to deceive you.
• Since binary options trading is more of a risky venture, despite the study and analysis going into it, the result of the investment is not always guaranteed.
• Potential profits are limited related to the movement in the underlying asset. Whether an underlying instrument moves $1 or $100 in the direction you predicted, your income is restricted to the value of the binary option.

Brokers that allow binary options
You’ll discover that a lot of brokers support binary options trading. Though, some of them aren’t reliable or fall far below the qualifications for suitable brokerages. You can read more about this in Expert Option Review 2020.

Final thoughts
Since binary options trading comes with its set of pros and cons, you’ll have to decide if it’s the right investment for you. After all, poor regulations and profit potential can give it an unattractive option. But, there’s no doubting the fact that binary options are an outstanding practice ground for a new trader who wants to take the leap.

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