If you have never traded binary options before and don’t know anything about the way it works, this article is a great place to start learning. We decided to write it when we realized that many people are actually asking us one and the same thing – what are call and put options? In short, they are the most basic concept in this particular type of trading and something that is fairly easy to understand. However, when you scratch the surface a bit, you encounter so much more that needs to be explored, so we thought it would be a good idea to point you in the right direction. Read on and learn everything you need to know.
Call and Put options | How they work
Call and put options are direct opposites of each other. They represent two types of trades you can open with any broker in the most basic trading mode. If you buy call options, this means you expect the price of your asset to be higher when the trade reaches its Binary Options Expiry Time than it was when you invested. On the other hand, buying put options means you expect the price to be lower when the trade closes. In any case, if your prediction turns out to be correct, you win. All trades of this kind have a fixed payout you get in case you get things right and that’s usually somewhere in the neighborhood of 85%. But this is just the main principle of binary options trading. Stay with us to get a glimpse of what else to expect.
Call and Put options | Many variations
Apart from what we described in the previous paragraph, you can encounter many other different trading modes in your broker’s offer. You can have things like One Touch, Ladder and maybe even some kind of social trading at your disposal, but everything always boils down to those two choices, hence the name binary options. The main advantage of this type of trading is that you don’t have to worry about the state of the market – no matter if it’s booming or dropping like a rock, if you get your predictions right, you will get paid. Obviously, to be a successful trader, you need to create your trading strategy. Understanding how call and put options work is the first step towards that goal.
Call and Put options | Conclusion
As you can see, there really is nothing too difficult to understand about this topic. Essentially all you have to do is to decide whether a price will go up or down. Just don’t base your predictions on pure luck. Study the market and come up with a sound strategy to increase your chances for success. We are here to help you with all that. Take a look at other helpful articles we have on this website and make another step in the right direction.