Binary options trading

Binary option trading is a type of financial instrument whereby you make predictions about the future price of market-traded underlying assets, such as commodities, stocks, indices, and currencies. With binary options, you are simply predicting if the price of an asset will rise above or fall below a certain point, within a set timeframe.

Binary option trading differs from traditional trading in a number of ways, but most notably in the following areas:

1. When trading binary options you are not purchasing physical stock or ownership of a company.

2. Returns are fixed and pre-determined, so you know exactly how much profit you will make before you commence trading.

3. Trades are short, normally lasting from between 10 minutes to an hour, although there are also different binary option products, such as One-Touch, that allow you to take long positions on an underlying asset.

4. With binary options you can profit regardless of whether an underlying asset is rising or falling in price.

5. With binary options there are only two possible outcomes: your prediction is either correct, whereby you make a profit, or your prediction is incorrect whereby you lose all or most of your initial investment

To open an account and start investing, visit Zerodha.

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