Kindergarten

binary option trading assets | What is traded in binary option

Financial assets constitute the basis of any binary options trade. There are a wide range of them available from commodities like gold and oil to stocks in companies like apple inc and barclays. Ensuring you can find something that you are familiar with, are interested in, or have the knowledge about is a great start to your online binary options trading.

All brokers offer a different set of tradable assets. Such as:

  • COMMODITIES (GOLD, COTTON, WHEAT)
  • CURRENCY PAIRS (EUR/USD, USD/GBP, USD/JPY)
  • INDICES (FTSE-100, DOW JONES)
  • STOCKS (APPLE INC, GOOGLE INC, BP)

Making sure that the broker you choose has the assets you want to trade in is an important factor.  All brokers will have an ‘asset index’ on their site where you can find this information and if you can’t find them there be sure to check our binary options broker reviews as we have listed them so you can quickly and easily compare between them.

Trading indices

Indices enable users to trade on a group of stocks traded on the major global markets. The trader in this instance is looking at the overall trend across this group of stocks, representing a performance indicator of the overall market of that region.

Examples:

FTSE-100, DAX-30, DOW JONES, NASDAQ COMPOSITE, IBEX-35

What effects indices

So what does affect to move indices? Since indices are the overal performance of a group of companies and each one of these companies is publicly traded and has stocks and voila! Stocks are the factor that moves indices up or down.

If we take a look at how we would trade indicies in binary options brokers its pretty much the same as with all the assets we have covered by now. If you decided upon the analysis you took that the certain indica will go up, you will choose the up and if you researched and saw there should be some troubles with certain indica and will go down for whatever reason, you choose down.

When to trade indices

You have to keep in mind that when you trade indices, you are limited by trading hours of the index market you are trading. This is not 24-hour market as forex is so take a look at index you want to trade and take a note of when are the trading hours of that market or ask your broker. You do not want to trade multiple indices, it is better that you focus on trading one and get really familiar with it.

Trading stocks

In traditional trading as well as in the binary options world, stocks represent an organization’s trading ability on the stock exchange. This includes stocks in the technology sector (apple, google), banking (jp morgan, chase and barclays) and many more.

Examples:

VODAFONE, LLOYDS, BRITISH PETROLEUM PLC (BP), GOOGLE INC, BARCLAYS PLC, APPLE INC, TELEFONICA SA

What effects the stocks

If you are reading from the start you know we already mentioned supply and demand and that is exactly what effects the prices of stocks go up or down. To quickly sum it all, if there is a bigger demand for a certain product, meaning the prices of their stock will go up and if they are having financial problems, meaning they are not profiting enough as a company and therefore is no real interest, the prices will go down.

When to trade stocks in binary options

First you need to determine the direction of where the stock will go after reading for example the news. From here you are able to choose based on your decision a simple up or down or any other binary option type that you feel comfortable trading with. For example, if you have earning report, it can be up to few days of positive or negative because it news are spreading. In this situation, the most advisable would be a no touch/touch option since the stock price is more volatile and it more easily breaks through support or resistance.

Trading commodities

Popular commodities, such as gold, crude oil and silver, provide traders with alternative options to exercise their binary options trading strategy.

Examples:

GOLD, SILVER, OIL, COTTON, WHEAT, PLATINUM.

What effects the commodities

What do you think determines the price in this case? If you said supply and demand you are defineatly right because thats exactly what it is all about. All business around the world evolves around this statement of supply and demand. As you may see the prices of oil are constantly going up and that is simply because there is a big demand for this commodity and there is never such thing as enough of oil.that is because we all have cars and in order to go around with them we need to put gas in them. There also comes times when demand is lower or buyers are not interested in paying such high price, then there is no other option as that the price of oil goes down.

I would also have in mind, not just in mind, put this on a paper or somewhere you will keep an eye on because that is how important it is. For example, united states department of energy releases every wednesday their inventory. Similiar reports comes of course for other commodities aswell. Based on these reports, the prices also regulate, so find out where and when they are published because it will help you be a better trader.

Trading with currency pairs

Many brokers provide traders with an opportunity to trade on some of the world’s leading currency pairs. Trading options on foreign exchange enables users to apply both their knowledge and their trading strategy to a market that is always moving. This is an area of both considerable growth and the potential for considerable gains.

Examples:

AUD/USD, EUR/GBP, EUR/JPY, GBP/JPY, NZD/USD, EUR/USD, USD/GBP, USD/JPY, USD/CAD

What effects the currencies

Since currency belongs to certain country or as in eur case, the whole european union that means currency is influenced by economy, political views, financial news, natural disaster and so on. Even rumors can do things to change the price of pairs. By looking at all these fundamental analysis you can determine at what price will the pair go, up or down and then determine based on technical analysis on chart when you want to put in the trade. You always need to look at support and resistance in technical analysis and you must learn to look at both fundamental and technical analysis to make it work for you in long-term and be profitable as much as possible.

When to trade with currencies

Currency is traded around the world and is fast becoming a popular as a trading commodity. Values in currencies vary against each other based on exchange rates and factors of how well a particular country or group of countries is doing economically. Therefore its fluctuations can generally be predicted. Currencies are traded against one another but only a few are recognised as major currencies. These include the british pound, us dollar, the euro, japanese yen and the swiss franc.

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Binary Option Kindergarten

All Lessons in Part 1: Binary Options basics

Lesson 1: What are binary options
Lesson 2: Binary Options VS Forex
Lesson 3: Binary Option VS Gambling
Lesson 4: Options trading basics
Lesson 5: Types of Binary options
Lesson 6: What is traded in Binary Option
Lesson 7: 60 seconds Binary option

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David Richard

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