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6 Things You Should Know About Binary Options

6 Things You Should Know About Binary Options

Binary options are a relatively simple form of investment – the one you can easily understand and utilize to make money on your investments. Investments in binary options are made in a hope that the asset or investment value will touch a particular target price on a given date

If you are good enough at anticipating the market, you will make money by getting a fixed amount in return but if you fail to predict the market, your investment will be worthless.

Anyone with an understanding of how the stock market works can learn what binary options are. Here is a simple list of 7 things you should know about them:

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1. Binary Options are both regulated and unregulated

Binary options are both regulated and unregulated as some are even traded at NASDAQ whereas some are purely traded on the internet.

SEC also issued warning to the US traders in terms of trading in unregulated binary options.

It is extremely important that you know whether they are regulated or not. Reading expert advice on binary options tips will surely help you to understand their risks.

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2. They are either call or put options

The call and the put are two basic and fundamental strategies used by investors dealing in binary options. And they are real simple to understand

If you believe that market is going to go up, you will buy a call option and otherwise you will buy a put option i.e. basically believing that market will go down.

3. Foreign vs US Binary options

If you are a US resident, note that foreign binary options are not regulated and you need to purchase binary options which are regulated under US Laws.

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All major stock exchanges in the US allow binary trading under the regulated laws, therefore, you can easily trade i.e. buy or sell them in the hope to make a profit.

4. Don’t buy them through websites

There are a lot of websites which are offering binary options trade in an unregulated manner. They are not only scams but also are not regulated.

You should trade them through a registered broker or trader who is registered according to the laws of your country and listed with SEC or other regulated bodies. Most websites are not registered therefore stay away from them.

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5. Your options to trade are limited

In all binary options, you always buy an asset- often called an underlying asset. Many exchanges, however, only allow trade in four types of assets i.e. stocks, foreign currencies, commodities, and indices.

If you are looking to trade on other types of assets such as property or bonds, such options will not be available. Since your options are limited therefore you need to be really specific and particular when choosing an underlying asset.

6. Time to hold a binary option can vary

In all binary options trades, you are required to hold the option up to a certain fixed period. This period can vary from merely 60 seconds to a year.

It is often the case that we fail to predict the future beyond few days, therefore, do not trade on binary options of the longer period until you fully understand the dynamics of your underlying asset. Binary options if fully understood and invested in a careful manner can make any investor a lot of money. If you are a new investor it is better to stay away from the investment methods, you do not understand fully.

If you understand this market, binary options can provide you a lot of flexibility to earn more and hedge your other investments to make more money. But be careful, it is not advisable to trade under the influence of your emotions.

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Adnan Manzoor

Data Analyst & Life Coach

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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