There are many different strategies intended to turn a profit when investing. Thanks to the prevalence of online platforms, these options are at your immediate disposal and the chances of walking away a winner are indeed very real.
Binary trades are one such instrument and they are employed by small investors as well as institutional organisations. It is nonetheless essential to appreciate how these positions function as well as to understand their primary benefits.
So, let’s take a quick look at binary trades as well as why CMC Markets is an excellent platform to employ.
The basics behind a binary trade
One unique aspect in regards to a binary trade is that the underlying asset does not necessarily have to increase in value to turn a profit. On the contrary, you will simply have to correctly predict the movement of this asset.
Even if the price falls, you will still walk away a winner. This is the main reason why the term ‘binary’ is very relevant. To execute a trade, you will be required to perform a few simple steps:
Selecting the underlying asset.
Choosing the initial (strike) price and selecting whether to buy or to sell.
Selecting the time frame before expiry.
Executing this position on or before the closing time.
So, it is clear to see that binary trades are quite easy to execute and unlike some other options, they are extremely flexible in regards to how long they are required to be held.
The types of assets
This sense of flexibility likewise extends to the amount of choices you have in relation to the assets which can be traded. Common examples include indices, commodities and Forex (currency) positions. The reason that this is important arises from the fact that different assets will naturally appeal to different types of investors.
Why consider margins?
Another very attractive aspect associated with binary trading involves what are known as margins. A margin trade requires only a small percentage of the aggregate value of a position to be deposited. The main benefit here is that you will literally own this position for a given period of time.
Assuming that the asset moves in the predicted direction, you will be able to turn a much higher profit. Although this feature is appealing to many traders, a word of caution needs to be mentioned.
Margins can also accrue massive losses within a short period of time if the value moves in the opposite direction. This is why such trades should only be executed after you have gained a substantial amount of experience.
Choosing the right platform
Selecting a transparent and efficient platform is always essential to enjoy the advantages offered through binary trading. CMC Markets boasts a number of discrete benefits such as a wealth of assets to select, robust levels of customer service and access to real-time news feeds. To learn more, please visit the site at your earliest possible convenience.
Further reading on binary trading
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