Binary options trading, at first glance, sounds like a relatively simple form of alternative investment online. Simply “Call” or “Put” the price of your asset, be it a commodity like gold or stocks in a corporation. If the prediction is correct, the capital is increased; if it is not, most or all of it can be lost. However, because binary options trading is done online, the next challenge is finding the correct binary options broker.
Initial Capital Output and Transaction Limits
Like with any other investment, binary options trading requires initial capital output. First, decide the capital output you are willing to accept. The minimum initial deposit is usually between USD 100 to 300, but most commonly between USD 200 to 250. This will vary from broker to broker.
The next thing to consider is the minimum and maximum transaction amounts that you want to invest. The minimum transaction amounts range from USD 1 to 25, but the most common are from USD 5 to 10. On the other hand, maximum transaction amounts can be as low as USD 500, and as high as 100,000. Most commonly, they are between USD 1,500 to 10,000.
Maximum Loss vs. Gain
Since binary options trading gives options on the maximum return and loss incurred per transaction, it is much easier to calculate the possible losses and returns on investment. The condition to remember is this: the percentage of possible loss rises the higher the percentage of possible gain.
Maximum gain is usually between 80 to 95% of the initial transaction output. If the transaction is USD 100, for example, the return is between USD 180 to 195 if the option is correct. The maximum gains from an incorrect option range from 0 to 25%. If the transaction is USD 100, the return will be anywhere from USD 0 to 25.
Binary options trading may be conducted on various assets, such as forex pairs, stocks indices and commodities. Each broker offers a variety of each, some more than others. Traders should first study the assets offered by each individual broker, and choose those which they are most likely to trade successfully on.
Binary options trading is conducted online. However, only a few brokers have a mobile-friendly app that allows traders to log into their accounts as long as they have data connection. The need for a mobile app depends on the device that the trader prefers to use. Some traders are in a position where it is easy to check their PCs at home or at work. Others need the ease provided by mobile devices.
Some traders prefer to dip into the waters of binary options trading right off–others would rather test them first. Only a few trading platforms offer demo accounts, on which trading is possible without any initial capital output. Otherwise, traders may begin accounts on platforms with low transaction requirements, and practice with small amounts to begin.
Finding the Correct Binary Options Broker
Unfortunately, it is impossible for every trader to go through every trading program to study the individual requirements and advantages of each. It is better to look for resources such as the binary advisor, which offer reviews and assessments of various trading platforms. The most important consideration for the trader is to find the correct broker for his or her lifestyle and long-term investment plans.