Binary options strategies for beginners

What are binary options?

Binary options are special financial derivatives, i.e. futures. Binary options are highly speculative and comparable to betting, as only 2 possible scenarios can result from a predetermined goal. Either the scenario occurs as planned and the trader wins or it just does not occur and the money is lost.

Who are binary options suitable for?

It is generally advisable for traders to study this topic extensively before investing money. However, if you want to invest your money in the short or even long term, you should forego binary options 100%.

Strategies for beginners:

For more success in the trade, we reveal 3 strategies that can help you increase your chances of winning.

The volatility strategy:

This strategy is particularly helpful when the market fluctuations are particularly severe. One of the reasons for high volatility can be a headline in the press. Accordingly, long-term trends in such markets are difficult to define. In this situation you can react as follows:

On the one hand, you buy a call option that bet on rising markets and a put option that speculates on the contrary. Both options must have the same term. No matter how the market evolves, with either option you will make a profit. Of course, the loser option must be written off the profit.

The trend-following strategy:

With this strategy, traders assume that a current trend will continue and can therefore bet on falling or rising prices. Many brokers also offer analyzes and various charts to help traders. However, traders who expect that trends will soon stop will rely on the opposite, the contra-trend strategy.

The hedging strategy:

This strategy is intended for investors who already own shares in a company, which tend to increase and thus generate profits. A put option can be purchased to hedge against loss of value. Should the value of these securities fall, the trader can generate profits with the put option and thus compensate for any losses. However, if the price of the shares continues to rise, a profit can be made when the shares are subsequently sold, which at best covers the put option.

Words at the end:

Traders should read the contractual terms at any binary options broker to avoid fraud or risk.

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