Trading is easy, fun and sometimes profitable. If you trade digital options in IQ Option you open your chances to winning up to 900% of your stake. And when you lose, the loss can not be more than your stake.
But no one wants to lose money? Else what is the essence of trading!
In this guide I will show you how to trade digital options with the hope that afterwards; you will do it right and get maximum profits from the trades you execute on IQ Option.
First things first, let’s define digital Options.
What is Digital Options?
Digital Options is a trading instrument that allows you to speculate on the extent of the price change, rather than just on the general price direction.
If the price of the underlying asset is to reach the threshold selected by the trader (known as the ‘strike price’), the payout may get as high as 900%.
However, an unsuccessful trade will result in loss of the investment. A distinguishing feature of Digital Options is a predetermined expiration time that works in 5-minute intervals.
Other Terms Used in Digital Options
- Underlying Asset
These are assets on which traders bid to change the price. These assets can be commodities or currency pairs. Majority of digital options beginners start trading with currency pairs and venture into other assets later.
2. Strike Price
This is the initial price that you will chose when opening a digital option. It is a target level that the position should go above or below – at trade expiration – for you to win.
This is the time when your trade terminates after the time you specified is reached.
4. Call Option
Open a trade in this direction if you believe that the position will go above the set strike price.
If you are sure the position will cross the strike price upwards then click the up button.
5. Put Option
Open a down trade if you think that the price of the selected asset will fall below your strike price. Press the down button if you think the asset is declining.
How to Trade in IQ Option
Basically, trading digital options involve:-
- Selecting an asset to trade
- Choosing a strike price
- Choosing the amount to trade
- Picking the trade duration
- And executing your trade by either striking the up or down button.
You will win up to 900% in profits if your position closes in the money and only lose your trade amount if the prediction is wrong.
Watch the video below to learn how trading digital options work.