If you are new to trading online, then you will come across two common words in this industry and that is the put or call option. These are the most popular binary option trading words. Both these terms are related to primary asset price movement.
The put option is a term that will predict the price decline of the underlying asset and the call option will predict the increase in the price of the underlying asset. You will stand to make a profit only if your put or call prediction for the underlying asset is not above or below the strike price at the end of the expiration time and date.
Here is a list with the most trusted binary options brokers where you can start trading binary options with put or call actions:
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The market conditions play a major factor in deciding between the put and the call option. If the markets are bullish, then investors feel that the value of the assets will rise and if the market is going through a bearish condition, then investors will want to sell off their assets. As you can make profits with both put or call options, binary options trading is very popular among traders.
What is call and put in binary options trading
Put Binary Option
You will be making a put binary option trade if you are confident that the chosen asset value will be lower than its strike price at the end of the trading period. The value of the commodity or the indices that you are trading on must have to be lower than what it started with for your prediction to come true and to earn profit for that single trade.
If the predicted value for the commodity or indices is higher than your put option, you will not be making any profit.
Call Binary Option
If you are placing a call binary option, then you are doing so with the hope that the option that you have chosen to trade with will end up at a higher price than what is started with at the end of the trading period.
If the commodity ends up at a higher price than the strike price at the expiration time, you will stand to gain a profit. It is basically the exact opposite of put binary option trading.
You should never make a put or a call option using only guesswork. It is very important for you to study the market behavior, latest price movement and carry out proper technical analysis before making a put or a call. You can use the available binary options tools to study the commodity’s price performance.