Digital options are also called binary options, they called so because the trader have 2 optional choises : He can predict that the price of an underlying assent (digital options traders can choose to trade binary options on indices, currencies and stocks and commodities) will raise ‘” this prediction called digital CALL option, or he can predict that the price will go down ‘” this is called digital binary PUT option.
The binary option payoff in both cases is similar: binary options gives its holder 75% payoff, most sites gives little less than that, but in any case the payoff is incredibly high.
Every binary option has 2 main outcomes, if the trader predicted correctly he gets 75% profit ‘”remember the trader don’t have to predict how much the change will be, he only have predicted the direction (up or down), it doesn’t matter if it went up by 0.01 or by 10%, anyway he will get the fixed payout which is 75% (depend on the binary options trading platform you are using ‘” try to seek for those how give you more).
In case the investor predicted wrong, it doesn’t matter how wrong was he, if the price of the assent went the wrong direction upon its prediction he will get back only 10% of his investment, but still trading in binary options can be a great financial instrument because 75% profit is something you don’t get easily. Another important advantage binary options have is the long list of assent you can trade, so you ability to choose an assent you are familiar with or an assent that most likely to go up or go down (it doesn’t matter how much it went this direction, as long as you predicted the right direction) make binary option a fantastic financial instrument, the question in this case should be how improve your chances in predicting the direction.
The key to improving your chances of predicting the correct direction should be choosing the right assent and using the knowledge you have on that assent ‘” try to read a much as you can about it. Binary option usually have long list of assent available for investment, this usually includes indices: NASDAQ, S&P 500, Dow Jones, FTSE 100, DAX 30, CAC 40 ; commodities : which mean you will have to predict if the price of the gold, crude oil , silver or copper will go up or down . Most digial options websites will let you trade binary options on currencies pairs and stocks. The more you know about the asset the more likely you will be able to predict its direction, learning about the assent and it’s behavior upon certain political events or other events is usually soothing that can be done free and easily , you just have to find the information and learn from it.