As with all trading, there are a variety of things that are considered ‘options’ in the binary options market. All of these are assets of some kind, and all have fluctuating value. Stock prices in companies are a possible asset, especially companies with very liquid stocks that are easy to sell. This can include companies such as Google, and also blue chip companies that are reliable performers.
Even more common is trading on the value of currencies or on commodities such as oil. Gold has been a popular commodity for this type of trading in recent years, due to rapid changes in its value. Oil is similarly popular for binary options trading, because it is subject to many market forces and thus has a rapidly fluctuating value that sometimes can be predicted by other market forces.
Forex or FX trading is an extremely popular option in binary options trading. In Forex trading, a person bets on the exchange rate between two currencies being above or below a given value, usually its value at the beginning of a contract. This is a popular form of binary options trading because it is easy to track and understand trends in currency exchange. A variety of currency pairs are available for this kind of binary option.
Last, options can be traded in indices such as the Dow Jones, the NASDAQ, and other markets. As with other assets, traders simply predict whether the market will go up or down. This can be a great option for people who lack intimate knowledge of any one asset or industry but feel that they can predict how the markets will move overall.
While deep knowledge of an industry can definitely improve one’s odds of predicting the movement of an asset, this knowledge is not always necessary. Many successful binary options traders rely on industry predictions and signals rather than their own personal familiarity with any particular asset.
