# Binary option what is it

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## Binary Options Earnings

Today, probably, already everyone has heard the word “binary option”, but few people understand what it is all the same? We have prepared for you a video clip and a short article about binary options.

Let’s figure out what a binary option is.

A binary option is one of the varieties of a stock exchange contract that is used to make a profit on price movements of assets (currencies, stocks, goods) in global financial markets. The buyer at the time of purchase of a binary option makes a forecast of how the price of his asset will change. This financial instrument has a fixed cost, a predetermined time for the expiration of the contract and the size of the potential profit.

### Binary Option Benefits

What are the benefits of this asset?

Firstly, the trader initially does not need much knowledge in the field of investment. It is enough to change the price. Secondly, the investor, during a change in value, knows and understands all kinds of risks of losing funds and making a profit. At the same time, he receives the greatest benefit. And lastly, when a threat arises, the depositor will suffer minimal losses, and in a better situation, he will receive a good profit.

If you understand that binary options is a high-risk financial instrument, then you should understand the advantages of binary options and should be even more interested in them.

### Theory

An option is a derivative (a derivative financial instrument based on that underlying asset. It can be oil, Bitcoin, the dollar against the euro or ruble, or one of hundreds of other assets).

An option contract is a form of transaction that implies that one of the parties has the right (but not the obligation) to perform a certain action.

In the case of the option – sell (if the option is “Put”) or buy (if the option is “Call”) the lot after a certain time at a fixed price. And here everything is extremely simple. If you buy an option, then you set the time for its exercise, as well as the direction of the price movement. Since there are only two directions of movement (up and down), the option is called binary.

### Instead of a conclusion

In the beginning, we wrote you about the advantages of binary options, but these are not all the advantages of this tool:

• Intuitive controls
• High chance to get income;
• It’s easy to start a beginner;
• The ability to start with minimal investment.

We hope that the video and article were useful to you and you learned something new about binary options.