Binary Option Basics For Beginners

Let me guess …you’re new to binary options.

Maybe you heard this was the fastest way to make millions of dollars …while you sleep. Or perhaps you heard from a friend binary options trading is like gambling online.

Either way, here you are and you want to know where to start.

Guess what? This page is going to help you do just that. Here’s what you’ll find below:

  • Recommendations for the best brokers for beginners.
  • How to create an account and what to expect when you do.
  • How to make your first trade.
  • A binary options glossary.

I suggest following along, if possible. By the time you get to the end you’ll of made your first trade and will be well on your way to becoming an intermediate trader.

Are you ready?

Best Binary Options Brokers For Beginners

Below you’ll find a list of binary options brokers we feel are best suited for beginners. These brokers were chosen based on their onsite education and demo options. Two things all beginners need.


$250100% VISIT SITE
$50160% - 180% VISIT SITE
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$25080% - 90% VISIT SITE


Creating an Account & What to Expect

Let’s first cover the basics to creating an account.

The first thing you’ll do is find the ‘create an account’ link when you hit the broker’s website. Most will have a form on their homepage you can fill out, too. It’ll ask for your name, phone number, email address and what password you want to use.

If you want to trade for real money I suggest you use a real phone number.

And that’s because the broker will give you a call. There are a few reasons why.

  • To welcome you to their platform.
  • To tell you about – and sell you on – their upgraded accounts. I’ll explain what these are in just a minute.
  • To tell you about – and possibly sell you on – more expensive forms of education, strategy and tools.
  • To tell you about their bonuses (and what you have to do to get them).

You should expect them to be somewhat sales-y on the phone. But you don’t have to buy anything.

Regarding the upgraded accounts – not every broker will offer different levels. But those that do will require you to deposit so much money for every level. And here’s what you can get out of it.

And more.

Are the perks worth it?

That’s up to you to decide. But most feedback I’ve seen points to no. So I wouldn’t feel pressured to deposit any more than you were originally planning to – with one exception:

Some brokers will have their first tier starting at $50 or $100 more than their minimum deposit. In those cases I would go ahead and deposit the difference. The free cash outs, demo access and other perks will make up for it.

Other than that the most common question I see from beginners is whether or not they should take the broker up on their bonus offer.

My answer – no. Let me tell you why.

All bonus offers come with terms. The general idea is you have to wager so many dollars relative to the bonus BEFORE you can cash anything out. This is to prevent people from abusing the bonus (depositing, getting the bonus and immediately cashing out).

But since the terms are so hard to fulfill it also doubles as a sneaky way to keep your money on their site, which you’ll trade with and likely lose.

So my suggestion is to avoid the bonus. At least for your first trading account. That way if you make any money you can cash it out with no questions asked. You can always sign up elsewhere down the line and take them up on their deposit bonus.


Alright, now with money in your account it’s time to make a trade or two. The next section will explain how to do it.

Binary Options Trading Basics (How to Make Your First Trade)

At this point you should have chosen a broker and created your account.

Now its time to make your first trade. Here’s the gist of how the process works.

The broker has a list of assets that fall under four major categories – forex, commodities, stocks or indices. Each asset’s value is dynamic – it’s changing by the second. Your goal is to predict if the value will increase or decrease within a specific time frame.

If you’re right, you win money. If you’re wrong, you lose money.

Let’s look at an example –

Right now on Spot Option the asset EUR/USD is valued at 1.08837. If I call the value will need to rise to 1.08838 or better within 60 seconds for me to turn a profit. If I chose the put option the value will need to decline to 1.08836 or worse to turn a profit.

That’s it. It’s really that simple.

You have lots more options than this, from expiries to types of trades to assets. It’s not hard to understand them all in theory, but making the trades can be confusing. That’s why I suggest you make a simple trade like my example above. After a handful of trades you’ll have the basics down and can move on to more complex options and strategies.

And likely make more money in the process.

Trading Glossary

Half the battle for beginners is just understanding the lingo thrown around. So here’s a glossary you can refer to with commonly used words and their meanings.

Asset Underlying instrument used to determine a contract. An asset will fall under the category of currencies, commodities, stocks or indices.

At the Money When an option expires at its strike price. A tie. No profit or loss for the trader.

Binary Option – A yes or no prediction on whether or not an asset will increase or decrease in value by a specific date and/or time.

Broker – The host of a trading platform.

Call – One of two binary option choices. You ‘call’ if you think an asset will increase in value over a specific time frame.

Commodities – Goods that are grown or mined.

Currency Pair – A forex rate determined by matching the value of one currency to the value of another.

Current Price – The value of an asset in real time. This is the amount you base your (trading) decisions on.

Expiry Level or Price – The value of an asset when the option expires.

Expiry Time – The date and time an option expires and cannot be traded further.

In the Money – When an asset reaches expiry and is profitable. This also refers to your overall win-rate as a percentage. If you make it in the money 50% of the time, that means half your trades have been profitable.

Index/Indices – Comprised of multiple stocks. The value reflects the individual prices of underlying securities. For example, the Dow Jones Industrial Average.

Investment – How much you deposit. This also refers to how much you’re investing in a specific trade/option.

Market Price – The value of an asset.

No Touch – When a trade doesn’t reach a specific level. This is also a trade option where you predict if a trade will or will not reach a specific level.

Out of the Money – When your predictions are wrong or unprofitable.

Payout – The amount of money (in profit) earned when an option expires in the money. Usually in the form of a percentage.

Put – This is the opposite of a call. You’re predicting an asset will decrease in value over a specific time frame.

Refund – An amount given back to the client after the option has reached the money (after it expires).

Return – An amount of money given back to the client after the option has expired in the money.

Strike Price – The value a binary options contract for an asset is sold. This also helps you determine if a trade was profitable.

Target Price – The amount an asset must reach for a trade to be profitable.

Touch – A trade that meets or exceeds a specific value (often within a specific time frame).