In binary options trading, stocks like Amazon, Apple and Google are popular underlying assets. Trading with stocks is straightforward and you can earn a high return with minimum investment of time and money.
Indeed, in the binary options arena, traders do not actually purchase a share in the ownership of a company but rather, they invest in a prediction of how the stock will perform over a certain time period. This represents a larger window of opportunity for profits as compared to trading in stocks in the traditional manner. After all, for traditional stock investors, it can take months for a fraction of an initial investment to be realised as profit through the buying and selling of individual shares themselves. With binary options trading, you have the potential to earn a high return for investing in your knowledge many times over and throughout the day.
How does Stock Trading work?
As mentioned before, when it comes to binary options stock trading, traders are under no obligation to purchase the underlying assets. Instead, all you have to do is predict whether the price of a stock price will rise or fall within a certain period of time. As with other types of trading, this prediction should be based on sound financial education, knowing the market and understanding the nature of the asset that you are investing in. Due to the fast-paced and volatile nature of the global financial markets, many trading opportunities arise throughout the day for potential earnings.
Types of stocks
By definition, a stock is a share in the ownership of a company, highlighting a claim on the company’s assets and earnings. In binary options trading, stock trading is redefined as a prediction of whether the value of a stock will go up or down over a set period of time. As a result, in contrast to buying shares and then selling them for profit, in binary options stock trading, you purchase an option. For instance, if you think the value of an underlying asset will increase, you can purchase a Call Option.Once you enter the amount you wish to invest, you will see- ahead of time, the amount you are going to earn in case your investment is successful.
The most popular stocks available for trading in binary options include Apple, Google and Vodafone.
Founded in 1976 by Steve Jobs, Apple Inc. is an American multinational technology company headquartered in Cupertino, California. Trading in Apple stocks runs Monday to Friday, from 13:40 GMT to 20:00 GMT.
Founded in 1998, Google is an American technology company specializing in Internet-related services and products. Trading in Google shares runs Monday to Friday, from 13:40 GMT to 20:00 GMT.
With over 430 million subscribers, Vodafone is a British multinational telecommunications company with headquarters in London. Trading in Vodafone stocks runs Monday to Friday from 07:30 GMT to 15:30 GMT. Vodafone is also traded on the London Stock Exchange and NASDAQ.
Other popular stocks available for trading in binary options include Wal-Mart, Facebook, Coca-Cola and Tata Steel.
Factors affecting shares
Stocks, as you probably already know, are very volatile in nature. Their prices are determined in the marketplace and there is no clean equation that predicts exactly how a stock price will behave over time. On the contrary, many forces can move a stock up or down including liquidity, news releases on earnings and profits and market sentiment.
So in layman’s terms, if people want to buy a stock, the demand for it increases and the price moves up. Conversely, if people want to sell a stock, there is a greater supply than demand and the price will fall. This is perhaps demonstrated to best effect by how Volkswagen’s clean diesel scandal of 2015 caused its stock prices to plummet.
Clearly, to speculate about the price movement of a stock, traders need to keep in touch with the global financial scene. To that end, as part and parcel of our commitment to provide our clients with the best trading experience, BinaryOnline publishes daily news reports in regards to currencies, commodities, stocks and indices.
Trading Stocks with BinaryOnline
Finally, trading stocks with BinaryOnline is a simple 4-step process.
- Log into your BinaryOnline account and choose a trading tool
- Located stocks and choose an asset for trading
- Set the expiry time of your trade
- Choose the direction you think the market price will go by purchasing a Call or Put option