Binary options are considered to have fixed return choices because of the simple fact that they can result to only two possibilities. It is referred to as a contract or agreement that allows the buyer to have the right of procuring an underlying asset that comes with a predeclared price within a specified period of time. The underlying asset is the security that's being traded which can come in the form of commodities such as gold, nickel, oil, silver and lead. It can also be a currency such as the Japanese Yen and the US dollar. Additionally, the underlying asset can be stocks sold by popular companies. Strike price is the term used to refer to the price which the owner sells or buyers the asset at.

In the process of trading a binary option at www.hotcosts.com, the person who buys the underlying asset selects a call option when he is looking forward to an increase in the security's value right at the ending of the period given or at the expiration of the allotted time, which may be the ending of the day, of the week, or of the month. The buyer should put a call option having a thought that the option price is going to be more than the present price during the trade. On the other side of the coin, the owner needs to place a put option should he is perceiving the option price is going to be much lesser than its current price at the time of the trade.

In reality, the binary trade is deemed to be the most flexible of all the available trades in the market these days. With that said, the trader can actually make a choice when it comes to the asset and the predicted direction. More than that, the trader may also select the expiry date. The owner of the security does have the control of all these elements. However, there is one thing that is left unpredicted and that is whether the price of the asset is going to be higher or lesser the current price during the ending of the expiration time or date. Read http://www.mahalo.com/how-to-buy-stocks-without-a-broker/ for a guide in buying stocks without a broker.

It is highly essential that both the buyer and the seller of the hot costs asset is making a rapid research about the behavior of the market and are trying to analyze the fluctuations that can possibly occur in the process of time. Remember that the main purpose of buying or selling an asset is to gain profits and if no analysis is done, gaining can be endangered.