Binary and digital options are only advertised and offered to professional traders. If you are not forex Practice konto professional trader, you can not trade binary and digital options. Which of the options are the best for trading?
Why choose a broker based on the type of options and expiry time? In our today’s article, we are going to explore in depth digital options, which is, in fact, nothing else than a fancy name for ladder options. This is a type of options in which the trader determines the strike price, which is the key to the achievement of the potential profit. Therefore I will do my best to explain this in simple terms. The picture shows the concept of digital options trading. The trader again speculates over the future price development, same as with normal binary options. This time the strike price is not limited.
Therefore, the trader can choose which one he or she wants to use. How do the digital options work? Let’s take one more look at the picture. The current price of the asset in the picture is 1. The prices on the left hand side are as follows: 1. When trading digital options, it is the trader who selects from a few pre-set strike prices the one he or she wishes to use.
The current closing price of a trade predetermines the future profit from the trade. The example in the picture shows the way it all works. Let’s assume that the picture is a real graph. We will earn more if we believe that the price is in a strong uptrend and, before reaching the expiry date, has grown much higher. I am going to outsmart them! Well, I am going to set the lowest strike price there is, because the chances that the price falls so low are minimal! This way I will never lose!
This means that your profit from a USD 100 investment will be merely USD 5. Given that what you put at stake is worth USD 100, this does not appear to be fair. This type of trading is more difficult to comprehend. Therefore it is not suitable for novices. I have been thinking mainly about online business lately.