What are Binary Options, Digital Contracts, Fix Contracts

The emergence of binary options as a derivative trading instrument has caused some concern and scepticism among traders. This is due to the fact that few understand the principle and features of this asset. However, after some time, traders appeared who was able to deal with binary options and start trading successfully with them.

What are Binary Options?

To understand what binary options are, consider a simple example. In fact, this instrument is a kind of bet. That is if a trader understands that for some time (say, 5 minutes) the price of an asset will rise, he can purchase the corresponding option, which is automatically closed after the specified period. In cases where the user's prediction is justified, he receives a certain profit for his bet. If the price starts moving in the opposite direction, then the trader loses all the money invested in the trade.

Unlike betting, for example, on sports events, binary options provide an opportunity to minimize risks and increase the number of profitable transactions. To do this, you need to understand the features of this tool.

Binary Options

Some traders consider binary options trading as a kind of casino game. But in reality, this opinion is erroneous and often leads to losses. The success of transactions with binary options directly depends on the effectiveness of the forecast, for the preparation of which one has to use financial market analysis tools: programs, indicators, etc. This means that certain knowledge and skills are required to profit from trading with this tool. Otherwise, it is impossible to constantly make a profit by selling or buying binary options.

What is the difference between binary options and digital contracts and Fix Contracts?

Binary options, after their overwhelming popularity in 2016-2017, interested not only novice traders, but also many regulatory bodies. So, already in 2018, a tough fight against this type of earnings on the Internet began in Russia, the government in every possible way began to try to equate binary options with gambling, in particular casinos, thereby banning the activities of many brokerage companies. This led to the fact that many popular binary options brokers began to rename their activities from binary options to digital contracts or fixed contracts (fixed contracts), but at the same time the trading the principle remained the same, the trader is also asked to predict the direction of price movement in a predetermined period of time ... Therefore, digital contracts,

Advantages of binary options (digital contracts, fix contracts)

Among the important advantages of binary options (digital contracts, fix contracts) are the fact that when working with this instrument, even before opening a deal, the risks and the amount of potential income are known. To make a profit, it is enough to successfully predict the direction of the asset price. The trader independently sets the time interval, at the end of which the transaction is automatically closed. And due to the fact that various instruments (securities, currency, etc.) are used as the underlying asset for binary options (digital contracts, fix contracts), you can trade around the clock.

Historical reference

The first prerequisites for the formation of binary options appeared in Ancient Greece, the navigators of which were determined in advance with buyers with the delivery times and prices of goods. Later, around the 17th century, Europeans adopted a similar practice. But the main impetus that provoked the emergence of binary options was made by the Chicago Stock Exchange, which began operating in the 70s of the last century. From that moment on, the financial market began to form in its modern form.

Ultimately, this led to the emergence of binary options, an easy-to-trade instrument that allows traders to earn money even with a minimum initial capital. In addition, today brokers often increase the size of their investments by providing various bonuses or holding contests. All this and much more has determined the popularity of binary options.

Binary Option History

However, you need to understand that this tool does not allow you to earn huge amounts of money for several days and with minimal investment. In order for binary options (digital contracts, fix contracts) to constantly generate income, you need to work and learn with them.

Types of binary options (digital contracts, fix contracts)

There are several types of binary options (digital contracts, fix contracts). Brokers provide different options for contracts, in connection with which it is necessary to find out the features of each of these instruments. At the same time, classic binary options are traded on most sites.

Contracts of this type is the most popular among traders. The essence of trading classic options is as follows: the user needs to determine the direction of price movement (up or down).

The second type of instruments under consideration is turbo options. This contract is valid for a short time interval (or expiration period that does not exceed one minute). Turbo options are convenient because a trader can quickly significantly increase the size of the deposit. However, there is a high risk associated with this. Mistakes can also quickly lead to the loss of all funds. The least popular type of binary options is Touch. The essence of trading boils down to the fact that the trader needs to guess the level that the price should touch. This type of binary options is used by experienced users who have previously worked with other contracts.

Specifics of trading binary options (digital contracts, fix contracts)

Binary options (digital contracts, fix contracts) are traded on the respective exchanges, the type of which is selected taking into account the underlying asset. Traders open transactions to buy or sell this instrument through the online platform of their broker. Currency pairs or securities are often used as the underlying asset. Also, some brokers provide the opportunity to conclude contracts for cryptocurrency, futures and other trading instruments.

Beginners are recommended to first work with currency pairs, since this asset is the most volatile, which allows them to gain enough experience in a short time. In addition, many techniques and strategies have been created to work with these tools to facilitate trading.

Binary options trading

As you gain experience, you can switch to other assets. Experienced traders recommend that you first try out a new instrument on a demo account and then switch to real trading.

Rules for choosing a binary options broker (digital contracts, fix contracts)

A broker is an intermediary (dealing centre) that provides access to the financial market. Such companies provide comfortable conditions for concluding transactions, offering assets, technical and other tools, trading terminals. The websites of large brokers have collected training materials on binary options. A number of companies hold seminars and webinars.

Due to the high the popularity of financial markets in general and binary options in particular, fraudulent brokers constantly appear on the Web. In order not to fall into the hands of malefactors, when choosing a company for cooperation, you must be guided by the following rules:

·         make a list of conditions that are comfortable for cooperation with a broker;

·         check with the broker for licenses and certificates issued by regulatory authorities;

·         study the user agreement;

·         avoid companies that offer large bonuses and the ability to make money quickly (within a few days or weeks);

·         study the ratings of binary options brokers.

It is equally important to study the reviews of real traders who previously worked with a particular broker.

Binary options (digital contracts, fix contracts) are another trading tool that, when properly applied, allows you to make money in the financial markets. His final profit depends only on the actions and decisions of the trader. Don't expect binary options to make a lot of money in a short period of time. Only constant and painstaking work allows you to make money with this tool.


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