I keep seeing people mention option contracts but I’m not really sure what they are.
I’ve been trading for a while but mostly just basic stuff. I’ve heard options might be beneficial but I want to understand how they work first.
Is it similar to regular trading or something else?
Binary options aren’t like regular options trading at all.
You’re basically betting whether the price goes up or down in a set time. Get it right and you win a fixed amount. Get it wrong and you lose everything you put in.
I blew $300 my first month treating it like a casino game instead of doing real analysis. Started focusing on support and resistance levels and my results got way better.
Options allow buying or selling at a set price before expiration. Unlike stocks, they’re more flexible.
You pay a premium upfront. This locks in your strike price and expiration date. Your risk is capped, unlike spot trading where losses can exceed your investment.
Options are contracts allowing you to buy or sell an asset at a set price before they expire. You pay a premium but don’t have to use them. Think of options like insurance for stocks. If you own shares and fear a drop, a put option lets you sell at your chosen price. If you expect a rise, buy call options to lock in a lower price. The main difference from regular trading is leverage. You can control more shares with less cash. Just keep in mind, if they don’t make money, options become worthless.
Binary options differ significantly from standard options. You choose a direction and timeframe to see if your prediction is correct.
The payout is known before making the trade. Most trading platforms clearly show potential gains or losses upfront.
Pay attention to timing since these options can expire quickly. Some last only 60 seconds while others may take a few hours.
Using price action along with candlestick patterns for entries works well. Moving averages also assist in identifying the trend direction.