Investors who want to invest in a particularly special instrument on the finance markets have the possibility to do so with binary options. These options allow returns even in case of falling prices- provided that you are able to correctly predict the development of the prices. Moreover, when buying a binary option you already know in advance how high the return is going to be at the end and at the same time, the loss is limited to the invested amount.
All in all, over the past few years, several brokers have specialized in selling binary options. However, with these providers you usually get offers for possible options and then, you can accept them. In such a case you merely decide on the amount you want to invest for buying them. But by means of a so-called option builder this changes. This function is being offered by more and more brokers. The greatest advantage hereby is that you can individually compose your desired options. The functioning is also very easy to understand.
Flexible instrument for maximizing the return
Even investors who still do not have any or only few experience in trading with binary options do not have to worry about that. Once you have tried your option builder for the first time you will quickly understand the related procedures and the necessary information. In addition, on the website of the respective broker, there usually are suitable explanations.
In general, by means of an option builder, you as a trader have the chance to compose binary options that perfectly fit your individual trading strategy.
Furthermore, you can, on the one hand, choose the underlying asset and the term of the option, on the other hand you can choose between a call- or a put option.
The exact functioning of the option builder differs a bit from broker to broker. Generally, you first choose the underlying asset which the option is based on. Then, you determine the term which often can be adapted every 5 minutes. Then, the most important step: the ratio of risk and return. Those who aim at a return as high as possible have to dispense with refunding. Those who are happy with a bit lower return have the possibility to get a certain percentage of the invested amount back, even if an option expires out of the money.
Adapting options to your personal strategy
with regard to the described procedure for the option builder it quickly becomes apparent that the handling it is not really complicated. This is why this function is very popular even with beginners with brokers having them on offer. Apart from the simple handling, there is another important aspect. Thanks to the option builder, you have the possibility to determine your personal trading strategy and the ratio of possible return and necessary risk.
By the way, in general, an option builder is offered exceptionally for composing call- or put options by almost all brokers at the moment. At the same time, these are the traditional binary options where the investor merely has to choose whether the price of the underlying asset will be higher or lower at expiry time.
Moreover, there are of course still more variants, for example, one touch options where the complete price development until expiry matters. These option types mostly cannot be acquired with the option builder yet, but this can only be a question of time.