Trading stocks doesn’t have to be a complex activity of reading up on a company’s performance, determining if they’re good for a short or long-term buy and hold strategy, and trying to diversify a portfolio for optimal performance. Instead, you can trade on the market with a little bit of money and a good sense of timing with binary trading. It’s a form of trading where you make a bid to stake out the time and amount you think a specific asset is going to trade at. You make a bid, put out a dollar amount, and wait for the designated time to come around or close your position before the time expires to make a profit.
Binary trading is a bit like gambling in that two people put up money against an asset’s performance. For example, you think a stock will make $250 by 2 p.m. while someone else thinks it’ll make $225 by that time. You put in a stake anywhere between $0 to $100 while the other person puts in the remaining amount. If you decide to let the option go to the expiration time of 2 p.m. and the stock price reaches your target, you get the entire pool of $100. If you lose, the other party gets your money. The same goes for when you think a stock is going to go down. And you can buy multiple options, known as contracts, with your specifications.
Read the infographic below to learn more about binary trading!