What is Binary Option? 

Trading in traditional options appeared a long time ago, even before the opening of world financial markets. But we will talk about binary options that have appeared quite recently. Now it is one of the newest areas of trade.

It began in 2008 in the United States, more specifically in Chicago. The Chicago Stock Exchange has allowed large traders to enter into new contracts for themselves. In 2012, binary trading was officially recognized as a full-fledged financial instrument. Now its popularity among traders is growing rapidly. So what is it?

A binary option is an option that, depending on the fulfillment of an accepted condition at a specified time, either provides a fixed amount of income, or brings nothing. Since the option is purchased in advance at a fixed price, the total amount can be either positive (in the amount of the difference between the premium and the option price) or negative (in the amount of the option value).

Simply put, a binary option is a trade in the financial market in which you make a prediction and bet on it. If the forecast is correct, you get 60-85 (approximately) percent of the profit, if not, you lose your entire bet.

Binary options - the choice is yours
Binary options - the choice is yours

 Binary options are very different. Let's take a look at the most popular types:

  •  View "up or down". (Or Put-call)

This is the simplest and most common type. All you have to do is guess if the price will go up or down over a period of time. It couldn't be easier. I choose "Up", and if the price moves according to my forecast, albeit not immediately, but with changes, it does not matter. The main thing is that in the end, by the time the term expires, it should be at least 1 point higher. And then you get the money.

It's the same with the Down option. It doesn't matter what is wrong with the price, the main thing is that until the end of the expiration it should be at least 1 point below the current level.

Expiration (from Lat. Exspiratio - expiration) - completion of the circulation of contracts on the exchange, fulfillment of obligations under futures contracts. In fact, this is the last time an option holder can demand exercise in accordance with the agreed terms.

  •  View "One touch" and "No touch".

In this type of options, it is necessary to make a forecast that the price of the asset will touch a certain point. All we need is just one touch. No more required. The opposite situation is the "No Touch" option. Here we need the price not to reach a certain level.

  •  The kind of border or range.

Another fairly simple type of binary options. The name speaks for itself. Upon expiration, the price should close in the selected range.

There is one more tool - Out of Range. The essence is clear - during expiration, the price must go beyond the specified range.

Even if the price moves outside one of the range boundaries, it is not a problem if the price returns to the range at the time of expiration. With the Out of Range option, everything is clear too. The expiration price must be outside the bounds we have set.

For example: the price range is displayed on the chart. If I expect the price to be in a range over time, I buy an option.

  •  Spread.

Here we are betting not only that the price will be higher or lower than a certain value, but also that this value will be specific. Let's say in 20 minutes the price will be 10 points higher than the current level.

  •  Paired options.

A type of binary option in which one asset must gain more points than another. Suppose we selected stocks X and Y. If you guessed that stocks X will rise in price more than stock Y at expiration, the trade is successful. If Y turns out to be faster, then the deal will not take place.

These are the main types of binary options, analysts advise to start with the simplest ones, and then move on to the complex ones, studying and delving deeper into the topic along the way.

How does a binary option work? 

Trading binary options can give you great profits. However, it is also very difficult and risky, like any exchange game. It has been compared to a casino in the sense that you can only get your original investment back if you win. This type of business comes with both risk and reward. Therefore, even with the right trading strategy, it is advisable to conduct a thorough analysis before diving into the binary options market.

Binary Options is a modern and intelligently designed marketplace for financial transactions. They represent the perfect combination of risk management and financial advantage. They provide a great way for traders to profit from their positions in the financial markets.

Trades with binary options on any asset can have a different expiration point - the time after which the option is closed and a profit or loss is fixed on the trade. Trading binary options is quite an exciting experience. Expiry time is important for options.

Choose your binary options strategy
Choose your binary options strategy

In fact, short-term options are those contracts that last from one minute to one day.

Short expiration options, as an intraday trading strategy, are in demand among market participants. But they are at high risk. This is due to the fact that the movement of the price chart itself is very difficult to predict when time is short.

When it comes to long-term play, binary options brokers determine the expiration time of a trade in different ways. Sometimes the maximum transaction period can be several days, weeks, but some brokers offer transactions that are closed even after a few months.

At the same time, the most demanded period of validity for regular players of a long-term strategy is two weeks.

There are many market behavior strategies depending on the expiration time. The importance of choosing the right expiration time should not be underestimated. After all, the result of your transaction directly depends on the decision made. Which strategy you use and how often you trade directly affects the choice of the expiration period.

Many beginners often get lost in the entire binary options structure and make mistakes when trying to execute their trades. For example, they are inspired by the prospect of making very good profits, and they start trading binary options without knowing enough nuances. On the contrary, those people who have sufficient knowledge of binary options trading platforms tend to make more profit than others.

Popular indicators for chart analysis
Popular indicators for chart analysis

How to start trading binary options in New Zealand? 

It is important that you understand the risks and rewards associated with binary options trading. Some people make a lot of profit from these trades because they take riskier odds and have a lot of ambition. However, they can easily lose everything because they did not have sufficient knowledge and training before they started trading. It is for this reason that it is important that you understand as much as possible in regards to trading before you start trading binary options.

You should take some time to learn as much about trading as possible about terms and strategies. If you do this, it will be easier for you to identify signals or trends that can help you make more money.

You should also consider taking a training course to improve your skills and knowledge. This is especially important when you want to trade frequently. Our platform has video tutorials and answers to frequently asked questions to help you trade. You need to get to know a few terms used in binary options trading such as call and put options, option strike price, expiration date, risk level or alternative terms.

Registrating on the investing platform
Registrating on the investing platform

There are several online binary options trading platforms in New Zealand today. Our internet platform provides a very simple interface for both novice and experienced binary options traders. There are live news feeds with information about the changing market and indicators to help you track and predict patterns. We allow traders to participate in demo accounts and learn to trade binary options before making the final investment decision. This is a very good practice because it allows the trader to gain knowledge of the binary options market before making the final investment decision.

If you are just new to the world of binary options trading, we recommend opening a demo account for binary options trading in New Zealand so that you can learn and practice trading until you invest your money. 

It is also useful for those who have significant experience in the field but are still learning and want to try out new strategies. We offer $ 10,000 to work in a demo account. As you already understood, you will not be able to withdraw profit in case of a successful transaction, but you will not lose anything in case of failure.

How to open account
How to open account

However, if you are new to the business and have traded many times, you may be tempted to open a live account as soon as possible. You should only do this if you know you have spare funds. On our platform, you can open an account with a small amount of only $ 10.

The most important reason the binary options market exists is that traders can use this method to enter the market and make profits quite simply. Just place your bet. It is quite easy to understand and many people who are new to binary options trading plans usually go ahead and participate in a demo account to get an idea of ​​how it works. Once they gain experience and feel comfortable participating in a real binary options trading plan, they will be able to go further and enter the live binary options market where they can actually make money on their investment plan by trading their assets.

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