In the world of binary options, a put option is the opposite of a call option. With call options you are predicting that the price of an asset will be going up, but with a put, you are hoping that the price of the asset will drop in value. This feature gives you a lot more flexibility than you would find in the traditional world of stocks. With stocks, you do have the choice to sell a stock short, but to do this, you need to have a margin account, and this can be a very expensive thing to maintain. $10,000 is the legal minimum for how much you need to have deposited in order to use this feature. With binary options, however, you can use as much or as little as you have in your account, as long as you meet your broker’s minimum trade amount—usually this is no more than $10, but it does vary from broker to broker.
This opens up a lot of doors to traders, especially those that want to start out small. Not having to meet strict financial guidelines is only one of the many benefits here, though. You are also alleviating a lot of risk when you trade like this. If you sell a stock short, in theory, if the price of that stock soars upward and you do not quickly cover your position, you can be at a potentially limitless amount of risk. This is not a good thing. But with binary options, this risk is greatly alleviated. The only risk you take when you trade a put option is what you type into the box on your broker’s trading platform. And even then, many brokers will pay you a small rebate when your trades are on the losing end of things.
In fact, trading put options is much simpler than just about any other type of trading. All you do is select an asset, click the down or put button, type in how much you wish to trade, select an expiration time, and then click the button to finalize the trade. All of this can be accomplished on the same screen in the matter of mere seconds.
This brings up another positive feature of trading these. You have a very wide range of assets at your trading disposal, and you will never have to change sites or platforms to access them. From the same web page you can trade currencies, stocks and stock indices from around the world, and even many of the most popular commodities. This creates a sort of one stop shopping for your trading and can be a great way to help save time and consolidate your trading.
If you are new to actively trading, put options can open up a lot of doors for you. They are easy to learn, and when used in conjunction with call options, they can give you a lot more control over your financial decisions. As you will quickly see, the more power you have over the decision making process, the more likely you will be to create more profits for yourself. And after all, this is the main point of trading in the first place. Binary options give you a lot more freedom than pretty much every other type of trading out there, and thanks to the varying scales of amounts you can use per trade, this type of trading is a potent tool for both the hard core experienced trader and the individual brand new to playing the markets. Put options alone open up many doors that you simply don’t have elsewhere.