What Does Binary Options Mean?
If you are interested in investments, then you have probably heard of the investment instrument known as Binary Options. Binary options definitions say that it is a financial derivative which lets you trade using the fluctuations of the market. We will look into more detail into binary options definition in this article and we will also look at the way which it uses to earn money.
Binary Options Definition
Binary options are financial derivatives which are also known as all or nothing options. It is named like this because it is too much risky and if you lose you won’t get anything out of it. By purchasing a Binary Option, you are placing a bet on the price of an asset after a certain period of time. You must put your wager on whether the price of an option will be above or below a certain threshold. If your guess is right, you will enjoy the fixed profit, but if you lose then you will lose your investments as well. Due to this nature binary options are often deemed as gambling. Technically, Binary Options are not truly an investment tool, it is more like betting.
How does it work?
How does Binary Options work? Suppose, you buy a Binary at $45 and bet that the price of oil will be at or over $750. If after a point the price of oil closes at $800 then your Binary Option will expire and you will receive $100 (All the Binary Options expires at $100). This incident is known as in the money. On the other hand if the price of oil closes at $720, then you will get nothing, not even the invested $45 when you bought the Binary. This scenario is known as out of the money. This makes dealing in Binary Options both rewarding and risky at the same time.
Is Binary Options Legal?
Yes, dealing in Binary Options is absolutely legal in many countries including the United States, Canada, UK, Europe, New Zealand and Australia. The earnings from the Binary Options Trading is also legal as well.
Is It Safe To Invest In Binary Options?
Binary Options definitions suggest that it is totally safe to Trade Binary Options. But there are plenty of reports of fraud and FBI investigations of them make the aspiring investors nervous. Yes, there are many cases where fake and fraudulent brokers cheat their clients, which lead to the loss of faith upon the Binary Options Trade. But the concept of Binary Options should not be blamed for this. It is the fraudulent brokers who have tarnished the name of binary options. If you choose a trusted and high rated broker to invest, then your investments are more likely to succeed. It requires patience, determination, faith, knowledge and a little bit of luck to succeed in the trade of Binary Option. If you are a victim of any fraud then report immediately to the FBI so that they can take appropriate measures against the perpetrators.
In the end, I would like to say that Binary Options offer a huge deal of return with a considerable amount of risk attached to it. If you feel like you can handle the risk in hopes of high returns then this is the perfect instrument for you.
Other Product You may like:
Binary Options Definition Tags