Know the “all or nothing” transactions
Imagine a game scenario where we can only have two results. This can happen at any time, although the bets can be seen more easily. If we move this dynamic to the financial world, we will understand that the binary option is an investment with only two possible outcomes.
In fact, this type of investment is much more specific than getting involved in traditional options. In the latter we resort to buying or selling alternatives on a particular good in which we have invested. Our option to sell or acquire will always depend on the movements of the stock market and we try to intuit your changes.
Traditional options are as simple as wanting to buy foreign currencies before their value rises. The fact is that, in this anticipated action, we can earn a percentage. Of course, in these “classic” operations the most important thing to consider is the price of the good in which we invest. In contrast, in binary options this is not necessary.
In the binary option only the trend matters
Suppose we are watching a baseball game and decide to play with our friends to guess which team will win. In that sport we know that there are only two options: Either one team wins or the other does. In addition, as there is no possibility of a draw, the game can be extended to extra inning. In fact, a game of this sport can last two hours, or even up to three and four.
All these analogies respond very well to the logic of binary options. It matters little that equipment is more expensive or good than the other, because even the Yankees can have a bad day. It is very normal that in the Major Leagues a small team manages to win some games to renowned franchises.