There are only two possible outcomes with binary options, also known as Digital or Fixed Rate Options (FROs). The payout is fixed at the time of beginning of the trade. With binary options the trader knows in advance, and can control, the exact level of risk involved. The difficult complications involved in other methods of market speculation are removed, such as with traditional trading you must constantly monitor the asset to decide when to sell, the value of your shares can decrease rapidly, you have to worry about complicated stop loss orders and you can lose far more than your stakes. With binary options the moment you place your trade, you know exactly how much you stand to gain or lose so that your risk is specifically limited. The trader is given the option to select the risk percentages for every trade with a potential 85% return on an in-the-money outcome.
If the trader has wagers correctly and the asset’s price is on the correct side of the strike price by the time of expiration, the trade is profitable and the trader receives a fixed payout amount. However, if the trader has made an incorrect prediction, they lose their investment sum.
Making a trade is extremely easy and straightforward and it's done is three easy steps: