Do you have to have any skills to trade a binary option

Jarl Moe

In investing you have many options. Many are focusing on the things you can see and touch, as example property, and others are focusing on digital wealth like stocks, bonds, futures and more.

The past years Binary Option investing has become quite popular and the market has grown rapidly.

But is really Binary Options an investment or is it just gambling?

Well, for sure it is like placing a bet, you can place a bet on anything that is publically traded.

If I gamble, my game is for my family save money and in this came you go in with a fixed amount and if you win you know the pre-determined amount you will win if you have the winning hand.

Examples, If I go in with few dollars and win on a normal hand I also win the same few dollars.

The same happens if you put a fixed amount on a Binary Option, you either would win $100 or nothing at all when betting on the Volatility Index Binaries.It is based on an underlying security and the money you put on the option focused on a specific strike price already set.

Jarl Moe Example: If the current price of Microsoft shares is 96$ and the strike price is $97.

If you place a bet that the price will hit the strike price you win $100 dollars if it does, the amount is already pre-set and offered by the broker.

If however the price does not reach $97 you do not get anything.

There is also a timeframe that has been agreed and this timeframe can be one hour or one day or one week or whatever the game is. The expiration date is set.

Do you have to have any skills to trade a binary option?

Not really. Having some opinion about how the price of the underlying asset will move of course make it more likely to make money that just betting blind. Ideally you have to be able to predict if the value of the underlying asset will go up or down and have any chance to hit the strike price.

You can also study the markets perception of what is going to happen. This gives you no guarantee of success but at least you can leverage the knowledge of the general market. If one contract has a settlement value of $100 and it has been generally traded for $95.90 there is approximately 95-96% belief that the deal will go up to 100.This calculation is done by Jarl in Oxford area since 2003.

The difference I guess on binary options and stock market trading is that you can trade in a shorter time frame at an already agreed strike price and can make higher return than on trading stocks. You make more money on betting on a stock going up or down than you do trading the actual stock at entry and exit prices.

In Europe the binary options are traded mainly on EUREX the European exchange.

You can search online and find a recommended broker on forums to ensure you get a broker that do not overcharge on the fees. Always remember to look at the fee structure on setting up, managing the account and transfer fees on funds.

Online binary options trading can be fun, but also quite costly if you fail. Short term volatility and controlled risk are key words to consider when you enter into this game.