A Short Tutorial on Binary Options Trading

Every successful venture requires an adjustment phase; binary options trading are no different. At the onset, you cannot expect to be familiar with how binary options trading works so your decisions wouldn’t be as sharp. However, given enough practice and experience, you should be able to learn the essential things that will allow you to be a successful options trader.

A Short Tutorial on Binary Options Trading

This short tutorial is a step in that direction. Read on to learn the basics of binary options trading.

In a nutshell, binary options trading is making investment decisions as it relates to the movement of asset prices on the stock market. Binary options get a bad rap in some circles because some think it is a purely speculative venture, but this is actually not true. Like all sound investments, trading decisions need to be based on sound data. The trader who does this successfully is the trader that will find the most success in options trading.

To trade an option, you need to first select an asset price. Say we choose to trade APPLE stock and right now, it is trading at $430 per share. You now have to choose whether you want to execute a “call” option or a “put” option. Call means you think the price will go up when the option expires; put means you think the price will go down at expiry. Next, choose your preferred expiry time for the option and then enter the amount of the trade that you want to execute. That’s basically it; the asset price will move relative to market forces and if at the expiry you made the right trade, you will get the calculated payout for the venture.

If you are new to options trading, it helps to know WHEN to trade best as opposed to trading on “just another day” for the stock market. For example, days when the corporate earnings report are released often provide a good barometer for how the asset price will behave throughout the day. A strong earnings report will pick the asset price up so it makes more sense to trade call options on that asset. The opposite is true if the earnings report is weak.

Think about these things when you consider binary options trading. You might be surprised at how much you can succeed just by paying attention to the details. It’s easy, quick, and very doable for anyone with a basic working knowledge of the market.