Binary options are an investment strategy

Binary options are an investment strategy very short term that provides significant potential for profits but also compromises the whole of their investment.

 

The equity investment is an activity fraught with technicalities and provides a host of variables and possibilities that even the most seasoned investors are able to distinguish in its entirety. Not surprisingly, it is the world's largest and most exposed to any trend, either the excessive euphoria or deepest depression market. Moods that generate astronomical profits or irreparable losses as investor expertise and vision to detect changes in the park. Binary options are one of the riskiest forms of investment.

 

What are the binary options?

 

A binary option is an operation carried out in a very short period of time (which are often called shorts) and is opposed to investments in the medium and long term (popularly called longs). Does this mean that the binary options can only be used if we short? Strictly speaking, no, because it is possible to plan strategies for use in long-term investment (issue the board in the post 'How to Live binary options'). In any case, it is a very dynamic and accurate investment.

 

In terms of its operation, binary options are named after the two variables which provide (all or nothing). How a binary option is activated? When the inverter detects that a security is undervalued or will experience a rise in short, active shorts on those titles. For example, if someone sees Bankia shares at 1.2 euros and believes that soon will rise much, creates its binary option on these assets. Then, the investor sets the level expected to go where the action (1.35 euros, for example).

 

Along with the level at which the option (1.35 euros) and the amount of investment (2,000 euros, for example), the investor should enter the time you want to keep that option in place it will be automatically activated. Generally, it is very short options, so its effect is often not go beyond a couple of hours (sometimes activated for five or ten minutes). When the action reaches the preset level, all securities purchased moments before they are sold and the profits are collected (in our example, would be 250 euros). A frantic pace.

 

Possibilities and risks of binary options

 

By now, most good readers or have already discovered the drawbacks of this strategy or it will be asking. Indeed, if the stock is revalued to the moment of purchase, all goes well (in most cases it is not necessary to wait until the title reaches the set level before it can be sold as long as the purchase price exceeded). Now when viewing the inverter fails miserably, no consolation prize, you lose everything invested.

 

Returning to our example of Bankia, we have assigned to their titles upside potential of around 15% (a rather spectacular figure, by the way). However, when purchasing shares jump news that adversely affects the entity and creates great uncertainty among shareholders, pushing down its price. That's where the other variable binary options (nothing) and the great risk of operating with this system without knowing first hand the market fall. Information is key to this strategy.

 

Not surprisingly, a novice investor or uninformed can interpret bullish turns where only small rallies are taking place with no prospects of consolidating an upward trajectory. Fundamental analysis and information management firsthand are great allies to successfully operate using binary options. In parallel, the inverter must be permanently alert status of their values ​​so that, before any shift in trend, margin available to react prematurely sell and recoup your investment with a small profit.

 

In conclusion, binary options are investment techniques that require great precision by investors and entail relative risks. Admittedly, it is unlikely that an action that is experiencing an increasingly vertical climb completely changed its trend in seconds or minutes. However, it can happen that at the time the investor realizes this revaluation has already been completed, nearly knocking down your choices automatically.