Binary Options Trading 101: Understanding A Notable Means Of Earning Passive Income

By Joanne Rivers

Have you ever wanted to develop passive income on a regular basis? Then what's stopping you from achieving it? If you're most people who site lack of time as the culprit that prevents them from earning big without exerting a substantial amount of effort, then binary options trade is probably just the thing for you. As offered in Australia and many countries across the globe, this simple way of trade can deliver great gains—given that—its risks as well as its rewards are properly understood. It should be noted that it is very different from other traditional options; as such, you need to do your homework and acquaint yourself. If you need help with binary options trade, perhaps this article is just what the doctor ordered for you. Read on and find out what it's all about and why it turned into a fad. Afterwards, you might become the next self-taught trader who enjoys financial security.

What are Binary Options?

Binary options are also known to many as exotic options, which is an investment type that offers a set return in a predetermined period. Here, there are two possibilities that you can choose from: short-term and long-term. What makes this particular kind of trading a cut above the rest is the fact that you can know the potential risks in advance, even before you make a trade. In general, if you need to figure out the direction of the price movement as well as its expiry time if you want to succeed.

What are the binary option types?

  • High/Low or Up/Down – This is the most common as well as most basic binary option. Here, you can determine if a finished price is higher or lower than the present price at the time of the expiration.
  • In/Out, Range, or Boundary – In this particular option, you can set a high and low figure. Here, you can predict whether the price range will finish outside or within the standard boundaries.
  • Touch/No Touch – This option has set levels, which are higher or lower than the set price. Here, you have to predict if the actual price will "touch" certain levels within the time of the actual trade and expiry. It should be noted that this particular option immediately payouts, regardless if the price moves beyond the "touch" level.
  • Ladder – This option is pretty much like a regular Up/Down trade, but instead of using the present strike price, the ladder features pre-set price levels that are "laddered" progressively up or down. Since these options usually need a meaningful price move, the payouts may go beyond 100 percent.

How to Trade

  • Choose a broker – This can be quite tricky since there are a couple of shady brokers out there. So make sure to do your part and check the Internet for broker reviews to find the best one that can work for you.
  • Choose the market to trade – Market lists are big and they usually cover stocks, forex, commodities, indices, and so on.
  • Choose the expiration date – The expiration times may vary from 30 seconds to one year.
  • Select the size – Take note that 100 percent of your investment can be at risk so it would be best to make the right decision regarding this matter. With this mind, make sure to weigh the factors before going big or small.
  • Check and confirm the trade – Many brokers out there give traders—like you—a chance to make sure that the details that are submitted are correct before a trade is confirmed.

What are the benefits of binary options trading?

With regard to the benefits, those that can be obtained from binary options trading are very different from those of forex market trading. The most important one is the fact that you—the trader—can have added control over your trades as well as risk in advance. Another benefit that is worth mentioning is that you can execute trades in various time frames, generally from 30 seconds up to 150 days. You can opt for diverse strategies and focus on the ones that best fit your needs and preference. Bear in mind, however, that shorter expiry times are riskier so make sure to choose appropriate ones.

When it comes to returns, you can choose amongst payouts that range between 70 to 93 percent, which is average in the binary industry. Furthermore, because of high payouts, binary trading has become quite widespread among travelers who want to maximize their earnings by means of investing in various assets.

Sign up a for a demo account

Since you're a newbie, consider signing up for a demo account since it allows you kick-off your trading course. There are a lot of companies out there that offer demo accounts you just need to scrupulously look for the ones that can help you in the most effective and efficient way possible. This is an good way to trade binary options in a straightforward as well as risk-free environment. Many are free and utilize virtual money, so you don't have to worry about losing cash along the way. Simply put, this allows you to learn the basics, develop your own strategy, and build your confidence. Afterwards, you can switch to real binary options trading where you can use your hard-earned cash.


All in all, binary options trading is a great tool if you want to earn passive income and in the long run, achieve financial freedom. Its high payouts as well as simplicity makes it ideal for busy folks who do not have the luxury of time in their hands. It is ideal even if you are an inexperienced trader who simply has a financial goal, vision, and drive, among others.

How about you? Do you have your binary options trading success story? Or other tips that can help interested individuals out there? Share us your thoughts on the comments section.

Posted In: Binary OptionsMarketsTrading IdeasGeneral