Trading currencies with binary options is a very popular and effective way to make money by investing in financial markets. This article will tell you everything you need to know to earn money with currencies and binary options.
How to trade currencies with binary options
Currencies are always listed in pairs, for example Euro vs. US-Dollar, or Euro vs. Yen. That means, no currency has a price by itself. All currencies only have prices in other currencies. If the currency pair of the Euro and the US Dollar is trading at a price of 1.30, for example, this means to get one Euro (the first currency in the pair) you would have to pay 1.30 US Dollar (the second currency in the pair).
To simplify this process, each currency has its own, three letter long abbreviation. The Euro, for example, is listed as EUR, the US Dollar as USD, and the Yen as JPY. As a new trader, you have to familiarize yourself with these abbreviations. Since they are all easy to remember, this should not be a problem for you.
The name of currency pairs features the abbreviations of both currencies. The pair Euro vs. the US Dollar is listed as EURUSD, the pair Canadian Dollar vs. the Yen is listed as CADJPY. This way, you can quickly access which currencies are featured in a list of pairs.
Almost every binary options broker offers currencies to invest in. Be aware, though, that every broker offers his individual list of assets. Most providers do not offer all assets, but only a selection of the most popular assets. In the case of currencies this means that, while most brokers offer the big currency pairs like the Euro against the US-Dollar (EURUSD) or the Euro against the Yen (EURJPY), smaller currencies are harder to find. Before you choose a broker, make sure to check whether it offers the currency you want to invest in.
You can invest in currencies the same way you invest in any other asset you trade with binary options. You can choose from these types of assets: