Binary Options Basics
There are two basic types of binary option: there is a call option and a put option. When you place a call option, what you are doing is predicting that a particular asset, whether it is a stock, a commodity, a currency, or any other asset, will be more valuable at the expiry of the option than it is now. A put option is precisely the opposite: you are predicting that an asset will be less valuable at the option’s expiry than it is now. This is to say that when you trade binary options, a call option means the trader wants the asset value to go up and a put option means the trader wants the asset value to go down.
This is the basic binary option, but there are many ways to alter the equation: instead of starting at an asset’s current value, for example, you can place a call or a put based on any value. That is, if the Euro is trading at 1.20 USD, you can place a call which will pay out only if the Euro is higher than 1.21 USD at expiry. As the binary options industry grows and evolves, new brokers (link to list of brokers) will continue to come up with innovative new ways to implement the basic idea of what a binary option is.
All call and put options must be placed through a broker. Many different brokers exist online, dating back to the start of the industry in 2008, and each one has different features. For beginners, it is recommended to start with one of the older, more established brokers: these tend to offer a wider variety of assets to trade in, along with better customer service. Once a trader has some familiarity with how options work, then he can start looking at brokers that offer different binary trading options, such as pair options (link), 60-second options (link), and touch options (link).
Most binary option brokers offer a platform (link), either as a downloadable program or accessible online, which will generally do two things: first, it tracks and displays all of the assets that the broker offers, and second, it allows you to place trades. All trades, no matter what the expiry is set to, happen in real-time.