Binary options as a beginner market, classical options trading advanced. To define financial experts, the two forms of trading instruments usually very simple. But what is behind the classic option trading and this is only for professionals? What are the differences and similarities? And what day traders must consider when options trading particularly?
Attractive are binary options especially due to its simplicity and the ability to quickly build an attractive extra income with sufficient expertise. Developed were these originally as an entry aid for professional options trading. However, the majority of traders now has specialized fully on the Trading with binary options. Acting with options, however, is at least as lucrative and requires partly a significantly lower initial capital.
Classic Option Trading – the basic principle
With the purchase of an option, the trader has the opportunity to decide by the end of the term of the option contract if he wants to buy the underlying security for a predetermined price. Appears the business is not profitable, it may forfeit its option. It is important especially that option from the warrant must not be purchased, but only can. Every option contract has by calculated probability of a positive result above a certain value. The expectation in turn depends on performance and expiry. So the option trade is less about the underlying and its price development but only to the option contract which is based not only on the underlying worth.
Relationship between the two types of options
The system of Binary Options is only derived from options trading. Basic difference is the “Binary”, ie the number it possible outcomes. Classic options offer more entry scenarios, which allow very different payouts. Traders can set only on price increase and price decline in binary options. If they are correct on the basis of a certain online scam entry period, then they get their bet back plus a profit. In the negative, they go out completely empty. Profit attract traders of binary options only from the price movement within a specified period.
While binary options represent no official financial instrument on the international markets and accordingly only “over-the-counter” (OTC) can be traded, the trading with options directly on the futures exchanges is possible. With binary options business arises only between broker and trader. At the American Stock Exchange (AMEX) and other exchanges and the trading with binary options is possible to a limited extent.
What options can be purchased?
In the review are traders and financial experts from around the world for some time especially due to the commercialization of almost everything. Huge efforts there to decouple markets such as the rice-trading from the OnlineScam stock market. The price of the vital in many parts of the world rice is increasingly controlled by the virtual trading on the stock market and not by supply and demand. Therein Critics see a great danger to the world economy and particularly the global society.
Options may also be purchased at almost all underlyings. This includes indices such as the DAX and the Nasdaq. Foreign exchange can also be trading options. In addition, options on commodities, food and parts, the weather offered. The latter may seem unusual, but for example, is for farmers a promising possibility of hedging.