How to trade Binary Options
Choose a Direction – Step Two
On the other side of this is the PUT button. Selecting PUT means that you believe that the asset’s price will fall below the current trading price. When the option expires, if the asset closes at a price that is lower than the price when you executed the trade, you have just earned a profit.
In the financial world CALL essentially means Up and PUT essentially means DOWN.
This step involves understanding the asset and the price history. News and other market data should also be taken into account when placing a trade and deciding on which way the asset may or may not go. For example, if a trader knew a news release was due out stating the current inventory levels of oil and this trader had a hunch or based on his research knew that the oil inventories would cause the asset to rise, he would select CALL and hope that his research led the price of oil to increase as the news report came out.
It’s not all about choosing up or down. As you learn more and more how to trade binary options, you will see that it’s about many factors coming together. If it was as easy as CALL or PUT, everyone and their mother would be making profits.
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