GdMail – Trading shareslately much in demand by various groups because it provides benefits. However, before jumping into the world of trading, you must first learn the terms that often appear. One of them is the term binary option , what does it mean?
Binary Options is a type of trading concept for buying and selling shares from the United States (US). Now, trading with the concept of Binary Options is quite popular in Europe and has spread to almost all countries around the world because it can make money in a short time.
In 2008, The Securities and Exchange Commission (SEC) accepted a proposal made by the Options Clearing Corporation to grant permission for several brokerBinary Options in the United States on the exchange market.
Understanding Binary Options can also be said as a method of activity carried out by companies that want to sell or buy certain shares for profit. So is this trading legal?
What are Binary Options?
Binary means “two” and option means “choice”. In options trading , a trader only has two choices of speculation, namely choosing up or down with a time limit when starting to press ” deal ” until the expiration time (expiration time).
At expiration, the actual transaction will occur. Due to the possibility that the exchange rate at expiration (actual trading time) will rise or fall against the currency to be exchanged, a robotic predictor is equipped on the broker’s site that traders can use as a transaction guide.
Binary options are a form of option contract and financial product built around the commodity market. Binary options require you to take one position, namely the price of the underlying asset will be above or below a certain price at a certain time starting from the interval per second, minute, hour, or day.
These assets refer to major currencies, commodities, stocks and indices that are freely traded on world markets and national exchanges.
Are Binary Options Legal in Indonesia?
Binary options lead to gambling. In Indonesia this site is an illegal site and does not have an official legal entity to protect it.
Launching from the Nahdlatul Ulama website at nu.or.id , the Indonesian Ulema Council (MUI) decided that option trading has an element of maisir or gambling based on speculative elements because it does not know the price of the goods it buys based on the “upfront exchange rate” based on DSN MUI Fatwa decision No. 28/DSN-MUI/III/2002.
So that potential investors must be more careful and ready to bear all the risks in the future because the money invested by the trader is not guaranteed by the Indonesian government.
Terms in Binary Options
- Call or high option is if the price is expected to rise or above the strike price.
- A put or low option is if the price is expected to fall because the price will close lower than the strike price at expiration.
- In the money is if the transaction is profitable or profitable. The amount of profit also depends on the number paid by the broker to the trader.
- Out of money is a transaction that is miscalculated from the initial plan so that it suffers a loss.
- Robotic predictor , which provides analysis of market movements so that a trader can make “speculative estimates” of asset prices within a predetermined time frame through his options.
- Range options are used when a broker speculates whether an asset will remain within a certain price range for a certain period of time.
- Expiration time is the time or moment when a binary option expires so this determines how long you can put yourself in the trade from 30 seconds to one year.
How to Trade Binary Options Safely
- Be selective in choosing an online broker by looking for a trusted, official site, and doing a reset to avoid fraud.
- Have a demo account to get used to and have experience whether the platform is working properly or not to know the real risks.
- Choose to trade with a broker that allows minimum deposits. For starters, the exchange allows a minimum deposit of $5-$10 and the amount per transaction is only $1.
- Choose assets that are traded in the form of stocks, indices, Forex, commodities and cryptocurrencies.
- Choose the right date and time for expiration starting from short term in seconds and minutes, normal in hours, and long term in days.