Binary options trading, also called "all or nothing" options, is a rather unconventional trading product that until recently was not really accessible for the typical trader. It is just now that some brokers are making this trading program a reality for the average Joe.

These binary options owe their name to the fact that when you enter this kind of contracts you will find only two potential results, either you win or you lose.

Indeed, unlike a standard stock or option trade, in binary options trading you will not earn more or lose more depending on the magnitude of the movement in price of the stock or underlying asset, mainly because in this kind of deal you will earn fixed payouts of about 70% as long as the stock or underlying asset's value ends up "in the money" by the time of expiration, which usually is within an hour from the time you enter the trade.

It means that you could get a 70% profit return in 1 hour, provided that the rate of the underlying asset ended up above the price where you entered the trade (if you purchased a call option) or less than the value you entered the trade (if you bought a put option).

Achieving this sort of return trading stocks or even traditional options is almost impossible, because indeed, if you were to trade a stock, it would have to go up in price by 70% within 1 hour, something I have definitely noticed, but only once or twice in all these years I have been trading.

That is why binary trading are such an excellent investing alternative, because this type of trading simplifies your job to predicting only market path -and not magnitude of the rate movement- which means that you are going to make money if you are right even if only by $0.001, just as long as your contract expires "in the money".

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