Trading commodities like gold online has become a popular activity in recent years for a number of reasons. One is that when you trade futures, you generally can do so for a low price; futures trading is generally commissions-free; you can also trade with leverage, which appeals to many people, and online futures trading platforms are usually easy to understand. Now you can trade gold binary options, which gives you a new way of profiting on gold, whether the price of it goes up or down.
Trading gold binary options is similar to trading binary options on any other asset. You may receive cash or the value of the underlying instrument if you win on your bet, or you may lose your investment completely or partially if you lose. The fact that there are two possible outcomes is why we call binary trading “binary” in nature. When you enter into a trade, those possibilities are fixed.
Best Brokers That Have Gold Binary Options
- TradeRush – Fun and exciting 60 second trades with $10 trade minimums.
- 24Option – Trade gold binaries daily at 24 Option
- Banc De Binary – One of our favorites. Has gold options.
When you enter into a traditional gold futures trade, you are simply betting that gold will move in the direction you’ve determined, and then you do your best to ride out the wave to profit, and get out when it makes the most sense to do so in order to maximize your gains. Some traders are deterred by this since there is no “fixed” result. Setting a stop loss helps you to “fix” your result, but a binary options trade can help you do so as well.
With a binary options trade, you can only win a finite amount of money, but you can also only lose a finite amount of money.
How does trading gold options work?
Perhaps you think that the price of gold is going to rise. Instead of buying gold at its current price and then waiting to see what happens, you may identify a specific price you expect gold to reach during a specific expiration time period. If gold reaches that price, you receive the amount of money you wagered, the “payoff value.” If gold does not reach that price within that set time period, you lose the money you invested on your wager.
Since you can technically stop your losses without trading binary options, you may wonder what other appeal this type of trading has. One unique attribute of binary options trading is that you may be given the option of setting very specific conditions you could not otherwise profit from easily in traditional futures trading.
For example, perhaps gold is consolidating, and you do not expect it to start trending.
It’s traditionally very hard to profit in a situation like this. If you enter into a Double No Touch binary trade on gold, however, you can state that you do not believe that gold will touch either of two points above and below the consolidation area during the expiration period. If gold continues to consolidate and does not reach or break these points, then you win money.
Considering how much time markets spend ranging within relatively confined areas, you can see how this could make you profitable. Fixed risk and potentially huge returns make trading gold binary options hot right now!