The financial market offers several alternatives for investors. Among them, Binary Options. Understand how it works!
You don’t have to spend a lot of time on the internet to see an advertisement about investment apps using binary options. In the videos, the applications promise investments and high earnings, in an easy way.
Investing in binary options is increasingly gaining the attention of those who already invest and those who want to start investing. Especially after the start of the pandemic, people saw the need to increase their earnings, looking for ways to invest and work from home.
Many people lost their jobs or had a negative impact on their financial resources with the pandemic. Combined with the need for social distance, investing in binary options has won over even those who never thought of investing. But many doubts still surround the subject.
What are binary options?
Regularized since 2013, also called fixed return options or digital options, binary options characterize investments made based on the tendency of an asset to rise or fall.
Trading is done through Brokers that have online platforms, you can open a free demo account on most trusted brokers to compare and choose the one that best suits your needs and to carry out this type of investment.
The valuation or devaluation of the asset can change in short periods of time, often in minutes of difference.
Basically it works like this: you bet on the fall of an asset, which had a value of $10.00 and closed the period in the amount of $5.00. Even though the asset rose before the end of the period, its price ended with a value lower than the initial, bringing profits for having “bet” on the fall.
Binary options allow you to invest in assets of different types: commodities (such as oil, gold, ores), indices such as Dow Jones and S&P 500, shares of national and international companies and currency pairs such as euro and dollar, dollar and yen, among others.
Investments in binary options differ from those of the Stock Exchange, being very speculative operations, having a different structure from the operation of traditional investments.
How do Binary Option work?
Binary options are based on three elements: the asset, the duration of the investment and in which direction the trend will be, that is, whether the value will rise or fall. The investor will then “bet” whether the asset will be valued (higher) or devalued (lower) within the time frame of the transaction.
One of the biggest differences in investing in binary options is fixed value remuneration, different from known investment options. If the investor gets the projection right, he can profit from 70 to 90% of the value of the operation, losing all his investment if he misses the projection.
One of the assets that receives more investments is the international currency parities. These investments consist of betting on the trend of one currency compared to another.
The most common currencies in this type of investment are the dollar, euro and yen. The investor can bet, for example, the projection of the value of the euro against the dollar, whether it will rise or fall.
However, it raises many doubts about how to invest in applications, or whether investment platforms are safe, even the best known. For example, people are unsure whether the IQ Option is reliable, as are other brokers.
Still, in general, many become investors through binary options.
Binary options investment formats
If you intend to invest in binary options, you can opt for different formats of operations. But, pay attention to your strategy when choosing the different operations, which are:
All or nothing (or money or nothing): It is the most widely used form of investing in binary options, it is also the simplest. Bet on increasing or decreasing the value of the asset, regardless of the final value of it, only interested if the asset ends the period with a value below or above what the investor projected.
One Touch: In this format, the period only ends when the asset reaches a certain value, presenting greater difficulty since the value has to be reached in the duration of the operation.
Assets or nothing: Unlike the first option, in this format the investor’s profit is determined by the value that the asset ended the period. It is an option that brings more profits, but requires greater knowledge of the financial market.
No Touch: Unlike One Touch, in this format it is desirable that the asset does not reach its limit value during the time of the operation.
60 seconds: Fast operations that are very popular, but require knowledge and experience in the financial market. This format allows the operation to be closed quickly when reaching the desired value, before the scenario changes quickly.
According to experts in this type of operation, it is essential to know the market, in order to learn about risk management techniques before investing in binary options.
In addition, to avoid scams, it is important to check the operator’s origin in this type of investment.