By K. Craig, Matzav.com
One of the simplest ways of American trading would be investing in binary options, commonly known as Fixed Return options. Started in 2008, this kind of trading entails a fixed amount of payment on a fixed day, and is a type of short term options. Sometimes the entire time period involved can be as short as a couple of hours or less. These are also known as digital options and/or all- or- nothing options as at the time of expiration you either get the contract maximum i.e. $100 or you get nothing. There is no middle ground.
It is a relatively easier trading method. Even beginners can work their way around these kinds of options and trade by knowing a few basic concepts. If one understands the basics and follow market trends, the profits would be pouring in. However, if a mistake is made, the trader loses all that was at stake. The entire deposit is lost and there is zero payout for her/him, as mentioned above. Nonetheless, its popularity has been steadily increasing because it is one of the low cost as well as low risk investment areas.
Economic indicators and Fixed return options
The process of trading in fixed options has a very distinctive essence. At the very core of which lays the ability of the trader to gauge and predict the future trends in the market. The better she/he is able to do that the better her/his chances of maximizing profit. These predictions and the subsequent decisions cannot be guessed blindly, even though sometimes guessing can pay off well. But to get assured effective result every time you need a particular strategy, a properly laid out plan. Such a plan is normally based on observing the country’s chief economic indicators and their movements.
Economic indicators are the statistical information about a country’s economic condition. It tells us whether a country is progressing, stagnating or regressing economically. It involves data on job creation, goods and supplies, employment rate etc. almost all of these have direct bearing on the investment market, therefore you need to have an updated working knowledge of these indicators, when trading.
Information on these indicators is available from many sources, like the online trading sites. Also the binary option brokers themselves provide the investors with weekly economic calendars, which highlight how each indicator is doing. These will provide you a starting point for taking your decision; however, these are not enough on their own. You need to study them in the light of the latest economic news and releases. You need to go through all of these collectively, wait it out for a few days while observing the particular trends and movements of the indicators in concern. Then on the basis of that proceed with your investment decision.
If you’re able to devote a little time initially to the process of studying the indicators and their correlation with the investment market and in researching a few dependable sources of such information (like the various websites easily available today) you’ll be able to reap benefits from fixed return options trading for a long time.
Mr. K. Craig is a financial writer by profession and has specialization in dealing with financial problems as well as its solutions and also written some great articles on refinance, mortgage refinance, credit counseling, credit repair, debt management, from binary options to forex trading and so on.