Different Assets in Binary Options Trading. Trade on Gold, Stocks & More

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Assets Available in Binary Options Trading

Updated on: 6 January 2020

In binary options trading you’ll be trading on the movement of certain assets. There are multiple types of assets offered in binary trading such as forex currency pairs, commodities, stocks, indices and some more. You don’t actually have to buy any of these assets in binary trading.

In options trading, you’ll only be trading on the movement and change in the value of these assets. For this reason, binary trading is much simpler and comes with less risks than traditional stock or forex trading.

In this article we’ll discuss the role of assets in this from of financial betting. Below we’ll teach you everything about all the assets provided and reveal which are the ones that can be predicted the easiest. Knowing which assets are more predictable than others is the key to becoming a successful trader.

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 pairs

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

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.

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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.

Indices

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.

Commodities

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.

Events

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 2020 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.

Assets Trading With Binary Options

Trading Assets With Binary Options

You can trade almost anything with binary options. After deciding that trading binary options is something you might be interested in, you will be interested to learn that there are many different types of assets to trade within the world of binary options.

Below are some of the most popular assets that can be traded as binary options.

FOREX – Trading Currencies With Binary Options

Trading Currency Pairs With Binary Options Is Way Easier Than Forex

Foreign Exchange, better known as FOREX or FX is one of the most commonly traded assets in binary option trading. The basis of FOREX is that it takes two currencies and compares them directly to one another. Essentially, in trading this form of asset, you are predicting whether one currency is likely to be stronger than another in the near future. FX binary trading provides a good start to investors new to binary options as most people find currencies relatively easy to understand. Additionally, since the FOREX markets are constantly changing, it supports the nature of binary options with their quick turnover.

Stocks

Is Apple Stock Going Up? Trade It Now With Stock Binary Options

Many investors have gained experience with trading stocks, however trading binary stock options is likely a new and exciting experience. One of the most intriguing features of binary stock options is the sheer number of them which are available to trade. Just as in classic stock trading, it may be helpful for potential investors to become familiar with a single category of binary stock options, such as technology, and broaden their scope as they become more experienced.

Commodities

Trade Gold Prices At Banc De Binary

Commodities have long since been a low risk, reliable method of investing and can be a good start for one looking to first enter the word of binary option trading. Gold, silver and oil are popular binary trade choices, based on their typically lower volatility. Similar to creating a portfolio of securities, adding commodities to your range of binary options tends to diversify your overall risk and create a buffer against substantial loss. Keep in mind, however that by trading in binary options, the overall risk is usually higher than when dealing strictly with commodities themselves.

Indices

Indices, like commodities allow for more diversification of risk, as you are spreading your investment over many stocks as opposed to a single one. In this sense, if a single stock does poorly, it is likely that other stocks in the index will perform average or decently to counter balance the loss. Depending on how much you want to diversify, you can choose indices such as the Dow Jones that takes an average of the 30 largest companies in the United States or select an index such as the S&P 500, which features 500 different US corporations. Typically, in binary options trading, investors who are more experienced and have a better knowledge of the market conditions choose indices.

Future Indices are a variation of these indices, where instead of predicting immediate or short term market conditions, you are making predictions for the long term. This typically is about 3 months in advance of current conditions.

By learning about each of the above assets, you will have a good overview of the specific types of binary options that are available to invest in. Set up a demo account and use trial investing in each of these assets to quickly become more familiar with them.

Asset Types Revealed And Explained

Binary options trading is all about the movement of various assets. When you trade, you don’t buy any shares or bonds. Instead, you are trading on change. Now there are many different types of commodities, stocks, indices and currencies to choose from, the number available will vary depending on what is offered by your brokers.

When you trade you decide whether or not you think that particular asset will rise or fall in price. You choose the expiry time (let’s say 30 minutes) and then you wait to see if the outcome of your trade is as predicted. Get it right, and you win money, get it wrong, and you lose your original trade amount.

Let’s say for example that the price of gold is rising. Now while it may be trending upwards over a sustained period how do you know that it is going to remain steady for the period that you choose? It is all about studying the markets, selecting a trading type and making your move confidently.

In this guide, you will learn:

    The different asset types available to trade Which of the sectors you should trade in Typical assets within each different category

Take your next step:

The Various Asset Types

When a trader places a binary options trade, they are essentially predicting the movement of that asset. Will it rise or fall in price within a certain amount of time? For some traders, they may have an affinity with a particular market, product or stock. It may be that they have studied the price of gold or silver or that they feel very comfortable with currency pairs (Forex) and how they will react.

The asset types fall into various categories which are commodities, indices, stocks and currencies. You will trade currencies in the form of Forex pairs; how a currency pairing will move against each other. Some brokers have lots of different pairs available to trade on while others have much fewer.

For some brokers, they only offer the most popular assets like gold. There might be as few as 20 while other brokers can provide more than 200. How many assets a broker offers might make the difference in whether or not a trader chooses them.

There are many different types of commodities, stocks, indices and currencies available to trade.

Trading on Currencies

You trade currencies in pairs. You can’t predict the movement of a single currency unless you have another to compare it. So with currency trading, you are trading on a pair. For example, it could be the USD against the CAD or the USD against the GBP.

As you can imagine many different pairings exist, but some are more popular than others. The common currencies are the USD (United States Dollar), the GBP (Pound Sterling) the Euro, AUD (Australian Dollar) and JPY (Japanese Yen). The typical pairings you might see are GBP/EUR, USD/CAD, EUR/NZD etc.

Like other binary options, the idea is to predict the movement of these pairs in a particular direction before the expiry time. In the case of the GBP/EUR, the pound is the base currency, and the Euro is the quote currency.

There are certain political and news factors that can affect currencies performance. Presidential campaigns, general elections and referendums will all have a considerable impact on performance, so it is always essential to ensure that you are trading in a period of stability and not when huge announcements being made.

Trading on Commodities

What are commodities? Well, they are naturally occurring products that are either found in the ground around us, from rocks and mountains to under the sea. These raw materials include precious metals like gold, platinum and silver and light sweet crude oil.

Other commodities include those products that are grown and used in the production of other products. These are grown and harvested in vast volumes across the world and are a huge part of our everyday consumption.

These primary agricultural products include commodities like coffee, sugar, wheat and corn. The list of commodities isn’t exhaustive, and some of them aren’t popular asset types; however gold and oil, in particular, continue to be big assets when it comes to binary options trading.

Trading on Stocks And Indices

There is a difference between trading in stocks and trading in indices. There are many different indices that you can trade on in the binary options arena. These include popular indexes like the NASDAQ, The Dow 30 and the FTSE 100.

When you trade on these indices, you aren’t trading on the movement of individual stocks and shares as you are when trading in stocks, just the performance of the index as a whole. If you decide to trade on the FTSE 100, for example, you are predicting whether you think the value of the FTSE 100 companies will rise or fall in a specific amount of time.

It may be that you know that the top stocks are doing particularly well or a particular sector is doing well. Often these indexes are made up of some companies from the same industry. If you prefer instead to invest your money trading in one particular stock or some stocks, then you can choose stocks as opposed to indices.

If you know your markets and can identify the particular trends, then it may be that you are more suited to trading in stocks and indices than commodities or currencies.

Most traders find that they lean towards a particular asset type and you might see that you have your specific favourite. Some might use the opportunity to make hay while the sun shines when specific factors are affecting the markets. Whatever you choose you should understand the markets you are trading in and know that the markets can change in a short space of time.

Robert has consulted for our website for five years and is a well-established member of the team. While he is passionate about the site, most of Robert’s time is focused on his current position as CEO of a professional coaching company.

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