Binary options are very high risk, even for experienced investors.
Also called 'all-or-nothing', 'fixed return options' or 'digital options', binary options enable you to make (or lose) money by predicting the short term movements in the price of a share, commodity, currency or index.
Usually, the timeframes are short and you don’t have long to make your call – in some cases less than a minute. For example, you might put money on your guess that a share will trade above its current price in the next hour. If you guess correctly, you could ‘win’ a fixed amount of money. If you guess incorrectly you would lose the money you invested.
Most binary options providers operate through an online platform. You have to make a minimum deposit to set up an account before you can start trading. There’s usually also a minimum amount you need to place on a trade.
Once you’ve placed a trade, in most cases your money is locked in until the option expires. If you decide you’d like to stop trading, you should receive the balance of your account back. This is the initial sum you invested, plus or minus any wins or losses. Make sure you confirm this before paying your deposit.