what is binary options?

[Sri1125]

Binary options are a type of financial instrument that allows traders to make predictions about the price movement of an underlying asset. A binary option is a "yes or no" proposition, where the trader predicts whether the price of the underlying asset will be above or below a certain price level at a specified time.

When a trader purchases a binary option, they are essentially placing a bet on whether the price of the underlying asset will go up or down within a specified time period. If the trader's prediction is correct, they receive a fixed payout, typically between 60% and 90% of the initial investment. If their prediction is incorrect, they lose the entire investment.

Binary options are popular among traders because they offer the potential for high returns in a short period of time. However, they also carry a high degree of risk and are often associated with fraudulent activity.

It's important for traders to understand the risks associated with binary options and to carefully consider whether they are suitable for their individual trading needs and risk tolerance. Additionally, many countries have regulated or banned binary options trading due to concerns about the potential for fraud and manipulation.

 

[jasmin]

Many say binary options trading is scam. Can you buys confirm this?

 

[Israelefagan]

Many say binary options trading is scam. Can you buys confirm this?

Many traditional traders say it is a scam because of the negative profit percentage. IE if you trade $1 with a payout of 92% you are risking 1 dollar for a profit of only 0.92 however if your trades are accurate or your win rate is over 55% you can definitely make good money in binary. Early on there were scam brokers that ran away with customers money but many of the ones still out there are legit.

 

[noahlucas]

Binary options are a type of financial derivative where the trader speculates on the direction of the price movement of an underlying asset within a specified time frame. It is called "binary" because there are only two possible outcomes: a fixed monetary payout if the trader's prediction is correct, or a loss of the initial investment if the prediction is incorrect.
In binary options trading, the trader selects an underlying asset, such as a currency pair, stock, index, or commodity, and then predicts whether the price of the asset will rise or fall by a designated expiration time. The trader does not actually purchase or own the underlying asset but instead makes a prediction about its price movement.
If the trader's prediction is correct at the time of expiration, they receive a predetermined payout, typically a fixed percentage of the investment. However, if the prediction is incorrect, the trader loses the entire invested amount or a percentage of it, depending on the broker's terms.
Binary options are known for their simplicity and relatively high potential returns within a short time period. However, they also carry a high level of risk, and it's important to be aware that trading binary options can result in significant losses. Furthermore, the binary options industry has faced criticism for unregulated brokers, deceptive practices, and a lack of transparency.
It's essential to carefully research and understand the risks associated with binary options trading before considering participation. If you are interested in trading financial derivatives, it is recommended to explore other regulated and more transparent instruments such as traditional options, futures, or contracts for difference (CFDs), which are offered by regulated brokers and exchanges.