In binary options market, you can trade in all types of assets. These assets include Stocks, Commodities, Forex and Indices. We will take a look at each one of them individually. Also, we will refer to each one of these as ‘asset class’. So, ‘Stocks’ are an asset class and so are ‘Commodities, Forex and Indices’.
Binary options allow you trade in a wide range of stocks in this asset class. You can find stocks from US companies, Asian companies, European companies and in fact all major companies in this world. To name some, you will find Google, Microsoft, Apple, Tata, State Bank of India, Bank of China, Hong Kong and Shanghai Banking Corporation and more. Each binary options broker has a long list of stocks that you can trade in. However, all brokers may not provide all stocks. For instance, some broker may offer Bank of China stocks but others may not. While some will offer Microsoft, others may not! There are brokers who may include new stocks in this asset class on request. So basically, you will have the flexibility to select the stock you want to trade in.
If you do not want to trade in individual stocks but rather want something more global in nature, you can opt to trade in major stock indices around the globe. Some of the top global indices where stocks are traded include Nasdaq, ASX, Nikkei 225, BSE, NSE, Dow Jones and more. Trading in indices are considered to be safer compared to individual stocks because indices are far more predictable compared to stocks that actually make up the indices. All binary options brokers have a wide selection of indices that you can trade in.
Commodities refer to products like coffee, oil, gold, wheat, silver etc. These are separately traded in a market known as Commodities Market. However, trading commodities in the specialized market requires the traders to pay storage and service fees. They actually need to purchase and item and take up responsibilities for delivery. This however is not the case with binary options market. Binary options market allows the traders to trade in the commodities of their choice without really purchasing them and hence, no storage and service fees are associated and the traders are not required to take responsibility for delivery of the commodities they trade in. So, in case of binary options market, focus is taken off logistics and put completely on the market place, making it more profitable compared to conventional Commodities Market. Also, another advantage of trading in commodities through binary markets is that traders can easily understand the price movements simply by following market news. For instance, the news for a sudden tension in Middle East that could possible lead to shortage of world oil supply can actually allow the traders to easily predict that prices for oil will move up and hence, they can enjoy almost sure and profitable trades.
Currency Pairs or Forex
Forex market refers to the market where currency pairs are traded. Traders are concerned about the exchange rates between the foreign currencies. Put is simple words with an example, what will be the Sterling Pound equivalent to 1 United States Dollar? This is called the exchange rate. The major currencies that are used for Forex trading are US Dollars, Sterling Pounds, Euro and Japanese Yen. Every Forex market place throughout the world will allow traders to trade in these basic four currencies but they too offer other currencies like New Turkish Lira, Australian Dollar, Swiss Franc, Canadian Dollar and more. Binary Options market too allows traders to trade in all major currencies as well as other currencies. In fact, most of the options brokers offer a very wide range of currency pairs to trade in. Trades can trade in currency pairs like USD/EUR, EUR/CAD, GBP/EUR, USD/GBP, USD/AUD and more.
The assets allowed in binary options include stocks, commodities, indices and currency pairs. These are real assets. However, you don’t really buy or sell any real asset in binary options trading. When these assets are actually traded in their individual markets, they lead to changes in the direction in which the market moves. These market movements can also take place because of external factors which can affect the trading of the real assets in their individual markets. Such external factors can include change in government policies, natural disasters, war etc. In binary options market, what you do is you actually predict the movement of the market that is an outcome of the trades taking place in real assets in their individual markets. Thus, instead of calling stocks, commodities, indices and currency pairs simply as assets, they are referred to as underlying assets.
A Bitcoin is digital currency which is known as Peer-to-Peer currency. It is not a regulated currency and there is no central authority for issuing the currency. Transactions using Bitcoins are not tracked. They are collectively managed by the Bitcoin network. It is very difficult to acquire this digital currency. There are only two methods that can be used to acquire a Bitcoin. First, one can buy a Bitcoin or second, one can mine a Bitcoin. Though Bitcoins are equivalent to paper money or regulated money, they are not available outside the World Wide Web but can be used for making online purchases or paying someone online. Bitcoins are very pricy. One Bitcoin can cost hundreds of dollars and can only be stored digitally. The other way of acquiring Bitcoins is through mining. Mining is a process of running very complex computer programs using Bitcoin mining software. Mining requires very powerful computers. It is reported that an average laptop can run a Bitcoin mining software continuously for 2 years without successfully mining even one single Bitcoin. Though Bitcoins come with numerous benefits, they also face a big threat from cyber criminals. Because Bitcoin transactions are not traced, hackers can get away with Bitcoin heists. One of the biggest Bitcoin heists to ever occur was in 2011.
No matter what, Bitcoins can be traded against regulated money on binary options market in the same fashion as someone trades a currency pair. The only difference is that in normal Forex trades, both currencies are regulated but when someone trades using Bitcoins, one currency will be a regulated currency and the other (the Bitcoin) will not be regulated. Trading in Bitcoins can be very profitable but considering the fact that Bitcoins are not easy to acquire, not everyone can trade using this digital currency. Also, not many binary options brokers will offer trading in Bitcoins. A few brokers like Traderush and AnyOption allow trading in this Peer-to Peer currency.