A very popular form of binary options trading is trading currencies. Many traders find that this is a good way to make money in the financial markets. In this article, Understanding Binary Options Currencies, we tell you all you need to be aware of in order to make a good profit with binary options and currencies.
In the world of binary options, currencies are always listed pairwise. Some of the most popular currency pairs are Euros vs British pounds, Euros vs Yen, and US-dollar vs Euro. To make things easier, most binary brokers list currencies in three letter abbreviations. Some of the most common are: Euro = EUR, US-dollar = USD, British pound = GBP, and so on. If you are new to binary options, learning these codes can be a worthwhile exercise that can save you a lot of time in the future. And as everybody knows: time is money.
All binary options based on currencies will be about making a comparison between the prices of the currencies within the pair. Let’s say that a currency pair is trading at 1.50. This means that in order to buy the first currency in the pair, let’s say Euros, you need to pay 1.50 of the second pair, let’s say US dollars. In a binary option, you can invest in a prediction as to whether this value will go up or down.
Currency pairs are represented by a combination of their respective abbreviations. The pair we mentioned in the above example, Euro vs US dollar, will show up as EUR/USD at the brokers. Euro vs British pounds is EUR/GBP, US dollar vs British pounds is USD/GBP, and so on.
You will find options like these at virtually every binary options broker there is. Having said that, it is also true that far from all brokers offer up a huge selection of different currency pairs. At most brokers you can invest in the major pairs, like USD/EUR, whereas you will need to look harder for more niche pairs like the Australian dollar vs. New Zealand dollar, and so on. If you would like to invest in more obscure currencies like this, you will need to find a broker that offers binary options based on them.
As with any other asset, it is also very simple to invest in currencies by using binary options. With most brokers you can use the following types of options for this type of asset: