how to trade binary on iq option
Binary options wiki Q&A
IQ Selection is one of the few online brokers that has managed to attract millions of traders from across the earth over a curt amount of fourth dimension. The main reason for this is their innovation and introduction of new features and instruments. One of their latest introduction is digital options trading.
This guide will look at both binary selection and digital selection. These are financial instruments offered past IQ Pick.
What is an choice
An Option is part of the derivatives types of assets. This ways that their value is intrinsically tied to the value of an underlying asset.
When you buy or sell an option, you do not own the underlying asset. You're typically speculating on whether the asset'due south toll will go up or autumn over a specified menses. Upon trade expiry, you lot volition either earn a profit or incur a loss.
The profit is usually calculated as a percent of your trade investment. The total corporeality you lot could lose is your trade investment amount. Notwithstanding, some brokers such as IQ Selection will allow you to get out position earlier the option expires.
Binary option trading on IQ Option
Likewise popularly known as high-low option, binary option trading involves speculating whether the toll of an asset volition rise or fall over a given amount of fourth dimension. Your trade entry marks the strike toll.
If you conceptualize that the option will expire when the price is college than this, all yous need to practice is enter a higher position. The trade expiry is always predetermined. On the IQ Choice platform, this ranges from 1 infinitesimal to 1 month.
IQ Option binary trades ever have a fixed return which is calculated as a percentage of the merchandise investment. The return you receive depends on the asset being traded and market volatility.
Digital choice trading on IQ Choice
The digital option combines the power of binary option and the increase in price of the underlying asset. And so rather than have a fixed return, the render for a digital option is calculated based on how far away the cost moves from the strike price.
The further abroad the toll moves, the higher the return. This ways that yous can potentially earn up to 900% return on investment when trading digital option. The trade expiry for digital option is one minute, five minutes and fifteen minutes on the IQ Option platform.
Similarities betwixt binary option and digital option asset types on IQ Option
Both option types have a predetermined expiry. One time the death period is reached, the position is automatically airtight. The trade expiry for both is indicated by a vertical red line on your nautical chart.
Both selection types require you predict whether the price will be higher or lower than the strike price on trade death.
IQ Pick offers binary pick and digital option for currency pairs and commodities.
Differences between binary selection and digital option on IQ Option
Binary pick trading is dependent on the direction of the cost relative to the strike toll. That is, whether the price will be higher or lower than the strike price at merchandise expiry.
Digital option trading on the other hand is dependent on both the direction and the cost distance from the strike price. That is whether the price will be higher or lower also as how far away the price volition be at trade expiry.
The render for binary option trading is fixed and predetermined at trade entry. The return for digital option trading on the other hand fluctuates as long every bit the trade remains open.
With binary pick trading, the maximum corporeality you can lose is your trade investment. With digital pick trading, your losses can be college than your trade investment. The further away the prices motility from your prediction, the higher your percentage loss.
Binary Selection accept death periods ranging from 1 minute to one month. The digital selection on the other paw has trade expiry periods lasting i minute, v minutes or xv minutes.
Trading binary selection on IQ Option
Once yous've logged into your trading account, click on the select assets feature (plus sign at the elevation of your trading interface).
Next, select options and so binary. Choose the asset pair you want to trade with. Apply a Japanese candles chart with five minute interval candles.
After analyzing the nautical chart, enter the amount yous want to trade. Adjacent, enter the trade expiry. While using 5 minute candles, the minimum expiry should exist 5 minutes.
You tin acquire more than about trading candles in The Ultimate Guide for Trading Candles on IQ Choice.
Trading digital choice on IQ Option
One time you lot've logged into your IQ Selection business relationship, click on the select assets feature. Click on options and and so select digital. Next, choose the assets you want to trade with.
Prepare upward a Japanese candles chart with 5 minute interval candles.
At the correct of your chart, you'll see sets of boxes with prices in them. If you hover your cursor over these boxes, you lot'll notice that the higher and lower buttons have possible percentage profits you can earn. For example, if the higher button shows a +250% profit, it simply means that you can make this amount if the cost is college than the strike toll (price cursor is at) upon trade expiry.
Once yous've analyzed the chart and adamant the direction the cost will accept, follow these steps:
- Select the strike price
- Enter your trade amount
- Select the merchandise expiry
- Select direction (higher or lower)
Decision
As you've seen, binary option and digital choice accept similarities and differences. Digital options have a higher risk-render compared to binary options. Now that yous've learned virtually both, try them out in your IQ Option do business relationship today. We'd love it if you share your experience in the comments section beneath.
Good luck!
Source: https://www.iqoptionwiki.com/binary-options-vs-digital-options/
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