Assets Offered in Binary Options Trading
As you probably already know, in this from of financial investing you’ll be trading on the movement of certain assets. The assets are the subjects of every binary options trading contract. If you manage to predict the direction in which an options contract will move during a certain time frame you’ll win.
There are many types of assets offered in binary options investing. The reason why you should be aware of the different types of assets is because the movement of some assets in this from of financial betting can be predicted much easier than the movement of some other assets.
Below you’ll find a description and risk index of every underlying asset in binary options betting. Keeping these things in mind is extremely important in becoming a successful binary options trader. Especially remember the risk index attached to these assets.
Forex currency pairs are the most popular asset types in this variant of financial spread betting. This is because the forex market is the largest financial investing market on the planet. In fact, this from of financial investing itself was once a spin-off of forex trading before it became an independent business.
Trading on forex pairs is basically investing on the exchange rate of various currency pairs such as USD/EUR, USD/GBP, EUR/GBP and much more. Good-quality financial service providers offer a very large selection of forex currency pairs to trade on. When trading forex binary options, traders will have to predict the future exchange rate of a currency pair.
Difficulty index: Medium
Predicting the movement of currency pairs is not necessarily that difficult. All it takes to know when a central bank is printing money to be 99% sure about the future movement of the exchange rate involving a currency. Read more about how to do this in our strategy articles.
Stocks are the second most popular asset types in binary options. Most common stocks include those of famous companies such as Apple, Microsoft, Amazon, AT&T, Google and more. Serious binary options brokers provide a very large selection of stocks including a lot of regional stocks such as Gazprom, French Telecom, BMW, and a huge number of others.
Difficulty index: Low
Predicting the future movement of stocks is actually easy in our opinion. If a company is doing well, then you should bet on the outcome that its stock prices would increase in the future. You may still lose a few contracts from now and then but overall you will always be able to generate profits.
Likewise, if a company is just about to release a new cool product then you can be pretty sure that its stock prices will increase in the future. Most professional traders prefer trading on stocks because the overall winning rate will in this case be much higher than in the case of other assets.
Binary options brokers also offer the possibility to trade on indices such as the DOW Jones, FTSE-100, DAX-30 and much more. Again, a serious binary options broker offers a very large selection of indices as well, including indices outside of the US as well such as indices from Germany, UK, France, Japan and more.
Difficulty index: High
The movement of indices usually doesn’t changes hugely during a certain type frame. However, small changes in the market happen all the time. Small fluctuation in the value of indices is very frequent, meaning that predicting the movement of these types of assets can be a bit more difficult than in the case of other assets.
Commodity binary options trading is also permitted by brokers. At most binary brokers traders have the possibility to trade on the movement of various commodities such as oil, gold, silver, wheat and more. Trading on commodities is in our opinion highly underrated by traders.
Difficulty index: Very easy
Trading on commodities is in our opinion the easiest form of binary trading. It’s widely known in professional circles that predicting the future movement of commodities is extremely easy in binary options trading. The general rule is that almost every time the value of a commodity will go up during a certain time frame.
Some binary brokers also offer the possibility to trade on the outcome of certain events as well. Most traders however regard this form of investment rather to be more close to sports betting than financial trading. For this reason, so far only a limited number of brokers offer trading on various events such as presidential elections, the Academy Awards and more.
Difficulty index: Easy to Medium
Predicting the outcome of some events is not that difficult. In 2012 it was pretty obvious that Barack Obama would be reelected as president of the US. However, it’s much harder to predict who wins the Academy Award for the Best Picture or who gets the next Nobel Peace Prize.
Do I Actually have to Buy Assets to Trade?
This is an extremely common question asked by many people who are interested in financial spread betting. The answer is that you don’t actually have to buy assets in order to invest in financial assets online. In binary trading you only invest on the future movement of certain assets.
So basically you won’t have to pay exorbitant amounts of money in order to be able to buy various assets like it’s the case with regular stock or forex trading. This means that if the value of a certain asset drops considerably you won’t really lose anything at all.
It also points out that in binary options trading you’ll always be able to tell how much you’ll be able to win and how much you can potentially lose. In case you don’t mange to accurately predict the movement of an asset, you’ll only lose the money you initially invested (which can be as low as $10).
Trade the smart way
So these are the most common assets in binary options trading. Remember the difficulty indexes we established for every asset category in order to be able to purchase the most profitable and most easily predictable contracts in the future.
This is where most beginners fail believing that it makes no difference on which asset you trade. In order to increase your winning ratio even further please read our additional binary options educational articles after which check out our strategy articles for some secret winning tips too.