In fact digital options is simply another name for binary trades. Although binary trades is rapidly becoming the best known name for this kind of trading it is also known as ‘all or nothing options’ and sometimes as ‘over / under options’. All the names have one common factor; they all refer to the fact that this type of trading gives you just two possible outcomes. You either make a gain or lose your investment; there is no middle ground.
The word binary means an outcome of one or zero, just as when you trade in these options. The term ‘digital options’ is a loose link to the fact that binary code is a basic computer language. This means it can be classified as a form of digital communication.
The idea behind digital options is simple; you purchase an option which states a specific financial instrument, or the market in general will move in a specific direction. If the market or asset moves as you predicted and your trade finishes with the price of the asset at or above the level your predicted you win the trade and will receive an agreed rate of return. This is usually between 75% and 90% of your investment; this can be an impressive return for just a few minutes work! Of course if your prediction does not come true you will lose all the funds you invested. You can choose a timescale to match your prediction.
How much can you earn when dealing with digital options?
It is impossible to provide an estimate of earnings. There is no limit, if you place mainly successful trades you can generate a significant income, although this will be relative to the amount of funds you are prepared to risk on each trade. The better you are at analyzing and predicting the movement of a given asset, the better your rate of return will be. Due to the short trading periods it is possible to make a healthy return very quickly, but it is also possible to lose a significant amount of funds in a short space of time.
Where can I trade with digital options?
A quick search on the internet will reveal a huge number of digital options brokers. It is best to use one which is registered and well established. The following are just a few of the possible options:
Risks of digital options
As with any type of investment, there are risks involved. One of the best things about digital options is that you always know the most you can lose before you start a trade. This is because you can either get the prediction right or receive an agreed rate of return, or, you get it wrong and lose your entire investment. It is not possible to lose more than you originally invested.
The safest approach is to only ever invest part of your portfolio at one time, never invest everything you have on one asset, no, matter how certain you feel.
Why do you get a bonus when you start to deal with digital options?
The majority of the digital options brokers offer a bonus when you make your first deposit with them. This is because there is a huge amount of competition between the various brokers. However, you will find that once you have received your bonus you will not be able to withdraw any funds until you have placed a certain quantity of trades, usually many times the value of your bonus. The amount and terms of the bonus will vary with each broker; it is essential to read the small print before signing up.
Are digital options the correct solution in my case?
Digital options offers an exciting and varied way of investing and potentially a good rate of return on your investments. It should be included as part of a bigger portfolio. To decide whether it is the right choice for you it s best to contact a broker and try a few trades using a demo account. You can then move onto small trades if you are happy with the process.
The best way to find out whether digital options are right for you or not, is to try to deal with the digital options. You can try to deal with the digital options with a very small bet and if you do not like it, you have not lost much money. If on the other hand, you like well then you can continue.