No matter which market or instrument you trade, the analysis method you select will be a big decision, especially on an intraday level. When we talk about binary options, technical analysis comes to the forefront. Fundamental analysis is the other method used by many traders for making their trading idea. Although we look at fundamentals […]
What Assets Can You Trade
Without assets to trade the binary options market would not exist. Imagine a marketplace without a market. This wouldn’t make any sense. However, there are dozens of assets to trade on a daily basis. The key to understanding these assets in the binary markets is you don’t actually take ownership of that particular item. For example, if you are trading in the stock market and bought 100 shares of Google, you would actually be partial owner of this public company. Obviously, your share would be minimal, but you would still be a shareholder. In binaries, it is totally different. All you’re doing is predicting whether the price of Google will go up or down. This allows you to trade dozens of assets without actually taking ownership.
There are four main types of assets to trade on the binary options market. Each of these are traded in the same fashion. Make sure you learn about each of these before trading them on a live trading account.
Forex – This is the marketplace that holds all the currency pairs. Some of the major currency pairs include the EURUSD, GBPUSD, USDJPY and many more. If you were to trade the Forex market you would actually own one side or the other. Meaning, if you were to buy euros you actually own the euro currency based on the price and if you bought the US Dollar you would actually own US dollars at the current price. The difference between Spot Forex Trading and binary trading is the way we buy and sell the asset. In binaries we are predicting whether the euro dollar will go up or down. More information on this can be found here.
Stocks – The stock market is widely traded on a daily basis. You can trade thousands of stocks from around the world. In the binary markets, you can trade a selection of stocks based on the price only. Using our example from above, you’ll actually trade the Google strike price predicting on whether the price will go up or down from the point of entry. With so many stocks to choose from, be sure to understand the stock you are trading before you actually invest in it.
Indices – All indices are made up of stocks from certain exchanges. In the example used in the video we talked about the Dow 30. Your goal is to predict whether that particular indices will move up or down from the starting strike price. Each of these will be open at different times, so be aware of this when binary trading.
Commodities – We would all like to own gold, but owning the actual physical gold doesn’t apply here. When trading gold on the binary markets you are trying to predict, if gold price will go up down, just like the other assets. If you were to invest $100 at a strike price of $1684, predicting the price to go up over the next 15 minutes, you will receive a payout of $180 assuming the rate was at 80%. If you were to lose this trade you would end up losing your total investment. This is also known as all or nothing trading.
From watching the video and reading about the different assets you can trade we hope this gives you a better understanding of what to look for when opening your account. There are always new assets added to the marketplace, so make sure you find a couple you like to watch.
Be on the lookout for more information about trading in the binary options market.