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Binary options are based on a 'yes' or 'no' proposition. Your profit and loss potential are determined by your buy or sell price, and whether the option expires worth $100 or $0. Risk and reward are both capped, and you can exit an options at any time before expiry to lock in a profit or reduce a loss. Foreign companies soliciting U.S. residents to trade their form of binary options are usually operating illegally.
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Binary options trading has a low barrier to entry, but just because something is simple doesn't mean it'll be easy to make money with. There is always someone else on the other side of the trade who thinks they're correct and you're wrong. Only trade with capital you can afford to lose, and trade a demo account to become completely comfortable with how binary options work before trading with real capital.
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The term “binary options” describes the choice you are facing quite perfectly: you always have to choose between just two possible outcomes, regardless of the sort of binary options contract we’re talking about. While there are more intricate (think ladder options) trades/contracts on offer out there, at the end of the day, they all come down to the choice between Call/Put or Touch/No Touch.
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Binary Options is an option of either 0 or 1, it's a quick and simple method of trading in which the trader has only two available options. The trader invests a certain amount of money and decides whether he believes the asset’s price will rise or fall during a predetermined time frame. If the trader is correct, he immediately receives the amount he invested, plus the addition of his earned profit. If he turns out to be wrong, the invested amount will be lost. When trading on a simple, easy to use binary option trading platform, the maximum profit and loss amounts for each trade are displayed, along with a time frame for their expiration.
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