A Look at the Binary Options Markets

What do the Dow Jones Industrial Average, foreign exchange market, crude oil, soybeans, gold, and news about the Federal Reserve all have in common? While an answer such as “they are all part of the world of investing and finance and play a role in the economies of the world” is true, the answer we need here is that they all are markets for binary options investing.

Binary Options’ Flexibility

It is pretty exciting to discover that you can make trades or investments in the binary options markets because it means you can leverage your knowledge about the world of finance. For example, let’s look at crude oil as a prime illustration of this. You may be someone who knows that oil prices can be volatile or flat and can change overnight due to political problems or disasters such as pipeline accidents. Thus responsive investing can be extremely rewarding, but only when you have the facts.

With binary options, you can use this information to unprecedented levels because almost all binary options contracts are remarkably short-lived, with many expiring within hours of being created. Thus, when you understand any predictable patterns – even if they are extreme – you can seek out a contract that you believe will fit into that pattern and enjoy the rewards of the investment.

The Yes/No Questions

It is helpful to know that most binary options investments, regardless of the markets in which they appear, are going to be the answer to a simple yes/no proposition. This makes things as uncomplicated as possible. So, relying on the crude oil example above, say that you hear of some upheaval in the oil industry and know that this will cause a spike in pricing over the course of the next day or two. You can get in touch with your options broker and look for any contracts or trading centered on crude oil. It is not often posed as a question but as a statement such as “Crude oil > $estimated dollar amount by Tuesday 3 PM EST.” This means that the binary option for crude oil will be more than a specific dollar amount by Tuesday at 3PM.

If you believe this will be the case, you can purchase a contract (or multiple contracts) at the price you feel is most reasonable. Pricing is never set at more than $100, with zero indicating that the answer to the question posed by the binary option is “no” and $100 being an absolute “yes”. You don’t find absolutes of this kind, and instead find dollar amounts revealing more certainty of the outcome.

The key, however, is to know your market. Yes, we can all feel as if news from the world can steer us towards lucrative binary options in different markets, but it does take some background knowledge to do our best in binary options investing. Think of it as a supplement to your existing knowledge and skills.

Do you have expertise in stocks? Use it to pick strong binary options. Are you well versed in commodities?  Use that knowledge to choose good binary options in that market. Knowledge is power, and nowhere is this truer than binary options.