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What are binary options for stock trading?

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Learn how to make profit on the stock market

These days there are many different ways to profit from the stock market and in most of the cases it comes to the old rule: buy cheap and sell expensive. Here I will look on an alternative financial instrument which allows trades to profit without selling.

The Stock Market

Let’s take for an example Nasdaq – the second largest stock market after NYSE. This virtual stock exchange includes companies such as Apple, Microsoft and Yahoo. On the Nasdaq brokerages act as market makers as they provide bid and ask prices for the companies’ shares.

Buyers and sellers meet on the market and all of them have different opinions about the price of a certain stock. A bullish investor expects stock price to rise and he buys it. If the company he has invested in perform well the stock will gain value and the investor can sell it on a better price. This is how he makes profit.

How you trade stocks with binary options?

Here you don’t need to buy or sell stocks. It is much simpler to make profit as you only need to focus on the stock current price. You enter the market at some point and you have to take a decision if the price will go higher or lower.

Binary options brokers are offering fixed profit on all kind of options such as One Touch, Boundary, 60 seconds or Binary 0-100. The return depends on the type of trading and could reach 1.000% on one trade.

For each option investors are being offered expiry time which can be from 1 minute to 1 month. It is up to the trader to choose the expiry time and the percentage of the profit in the money and out of the money.

Why stock prices fluctuate?

One reason is supply and demand. The price will rise if buyers are more aggressive than sellers and the price will fall if sellers are more forceful than buyers. In other words if many investors are selling Apple stocks that means the stock price will go down.

Earning statements by the public companies are other important factor which investors take into consideration. A company’s reports affect its stocks price directly as it shows exactly how much they’ve profited or lost during the quarter.

This financial instrument is designed for both short and long term traders. It provides investors many different types of options for trading stocks. It increases significantly the profits on short term investments such as 60 seconds.

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