Binary options are easy to trade and this is the reason that this trading form has become tremendously popular among traders all over the world. The strike price of the security is the main components of this trading form. Time is another main feature of binary options. A trader expects that the strike price of the security will rise or fall over a fixed period of time and the profit and loss depends if the expectations are correct. The price of the security is another component and its direction only tells whether the estimation of the trader is wrong or right and if the trader will get the payout or not.
Trader can make mainly two types of trades in binary options. If he thinks there are chances for the strike price to go higher than its present rate, he can choose a ‘call’ option or on the other direction hand he can select a ‘put’ option if he thinks that the option will end below the strike price. The other feature of binary options is the fixed payout which is agreed between the seller and the buyer at the time of the contract. This also enables the trader to know his risk in advance which has made binary options very popular because this way a trader can preplan his option and minimize the risk. Binary options do not require huge amount to start with and a trader is allowed to start the trade with as little as $50. Seeing all these components, one can imagine why this trading tool has become the most popular trading vehicle among traders.
