Easy enough to understand even for the layman
Trading foreign exchange binary options is no rocket science and is easy enough to understand even for those who are not very well versed in finance. Using an analogy, Forex binary options work like a betting game wherein a person wagers a required amount whether the currency exchange rate will go higher (call) or lower (put) versus a given strike price within a specific period. Foreign exchange binary options will pay the trader a set amount of money or asset if he is right and he gets nothing if he is wrong. Simply put, trading foreign exchange binary options is an all-or-nothing financial deal. The most common currency pairings available for Forex binary option trading include the Euro-US Dollar exchange while the least common couplings include the Australian Dollar-New Zealand Exchange.
Foreign exchange binary options offer minimum risk investment alternatives
Unlike other trading platforms, currency exchange binaries do not require an individual to shell out a huge amount of money. The minimum investment can go as low as $5, however, there are also those which ask for as high as $3,000. The range of the investable amount gives a trader the freedom to invest what he can afford which is ideal for beginners while they are still learning the tricks of the trade, so to speak. There are no surprises – off the bat, a trader knows what he stands to gain or lose depending on the outcome. Of course, Forex binary options trading is not exactly horserace betting, although the similarities are apparent as well. There is a scientific way of calculating whether a foreign exchange rate will rise or fall. One example of such formulas is dubbed as the Black-Scholes valuation formula. This formula factors in a spectrum of variables including strike price, beginning stock value, interest rate, number of days to maturity, dividend or profit-sharing rate and volatility just to name a few.
Total control over one’s investments in a non-daunting trading space
Forex binary options trading can be done over the internet giving a novice trader total control over his investments, as well as veer away from. How many insider scams have plagued the stock market over the last few decades which resulted to the financial destabilization of many investors? With Forex binary trading, the market is big enough that not one broker or company can vastly influence the trade.