If you are looking to learn more about how Profit Trading Bot binary options Works , this Profit Trading Bot Reviews will explain everything you need to know in that regard. By the end of this article will be fully aware of how the binary options and how you can benefit from the investment in your endeavors.
What are binary options?
Binary option is a contract between you and the trading platform you are working on and which gives you the option to sell or buy a specific tool (such as securities, commodities and forex … etc) through the price and the date (or time) pre-specific.
You can buy a binary option at a low price compared to prices of the tool you want to buy in regular trading. And then when the price is moving in the expected direction, you can execute the option and make a profit.
On the contrary, when the price moves in the opposite direction to your expectations, all you lose is the initial value that you pay when you purchase the option.
The binary options are also known as digital options (or Options everything or nothing). On the contrary, the American-style options that can be implemented at any time after purchase (assuming that the price moves in the direction of your expectations), binary options is always a European style options that can be implemented only on the date specified in advance (Closing date).
The types of binary options?
There are two types of binary options which you can purchased through the options market and depending on the direction you expect to take the tool you want it to price. These two types are the Call option and option Put.
1. Call option
investment if you expect that the tool that you want the price will rise by the end of the date the option expires, you can buy a Call option. And this shall be like to enter into a deal to buy the normal trading terms.
2. Put option
If you expect that the tool that you want the price will fall by the end of the date the option expires, you can buy a Put option. And this shall be like to enter into the sale of the ordinary in the stock market or forex trading
An example of binary option trading:
We are now deliberating the imposition of the currency pair EUR / USD current price is 1.3230. If we expect that by the time the option expires price will rise up to 1.3300, we will buy Call option. Each point (known as the pip) equal to $ 10, so in this case would be a profit of 70 points, the equivalent of $ 700 (US $ 10 x 70). You will have to pay the value of the option when you buy it and the value of this variable and depend on the state and market conditions at the time.
If we assume in this example that the cost of buying the option is US $ 50. At a time when the option expires solutions Call this, if the price rises and skip 1.3300 will have achieved a profit of $ 700 and the value of net profit will be $ 650 (US $ 700 – US $ 50). On the other hand, a decrease in the price of the EUR / USD below 1.3300, only to lose the 50 dollars that you pay when you purchase option.
And is one of the binary options trading features that you do not have to know the amount of change in the price accurately, all you have to do is to forecast the direction of the trend or price objectively and then buy the appropriate option.
Binary options trading features with Profit Trading Bot:
1. More easily than normal trading.
On the contrary, from the normal trading (regular stock market trading) where the amount of your winnings or your loss depends on the amount of change in the price, system of gain and loss in the binary options trading (bilateral trade) depends only on the direction of the price change for a certain extent. Regardless of whether the price may skip the previous limit determined by one point or hundreds of points, you’ll achieve a constant gain.
2. A very useful tool in Hedging
Binary Option is the perfect choice for businesses that are exposed to fluctuations in the currency market. Profit Trading Bot importers can use options to hedge against any undesirable change in the currency they want.
3. The risks and rewards of unexpected
While trading in the options market, you can find out the exact amount of profit they will earn or the amount of loss that may be exposed to before you start trading. This allows you to plan and manage your portfolio for a high level of efficiency and accuracy efficiently.
4. Dip limited
In normal trading (normal) stock market trading, when the price is heading tool reflecting expectations could cause the big loss for you. On the contrary, the most that you lose in binary options trading is the value of the option that you have paid more than just that, but nothing.
5. distribution of your risk over a larger portfolio
When trading in the options market, you have to use a small portion of the money to buy a binary option for a certain tool compared to the price of this tool in regular trading (normal) stock market trading. This gives you the opportunity to provide a lot of liquidity to expand your trades on the many tools and thus gives you the opportunity to manage risks better.