The brokerage company AnyOption offers its clients the largest choice of assets for binary options trading on an international financial market: stock indexes, shares, commodities etc. Such quantity of assets amazes and surprises beginning and inexperienced traders. Therefore, they are mostly aimed for those, who already have certain skills, knowledge and experience in dealing with effective trading strategies such as gap trading strategy, day trading strategies and many others. Coming back to novices, they can trade binary options by using those types of assets which they are familiar with, no matter whether it is stock or foreign exchange market.
This short guide is devoted to beginners, giving them a chance to understand which assets they should start from and which are the most suitable for them. Let’s start with binary indexes.
Indexes are a certain figure that demonstrates the condition and dynamics of market securities, such as, for example, shares, bonds, obligations and many others. In simple words, stock index – is a combination of securities, e.g shares of a few largest companies. From the one hand, you are capable of trading shares of each company separately, or you can make holdings of shares or the so called share portfolio.
Meaning that you know the shares of which company have the highest volatility and which have the lowest. This knowledge lets you make a simple and quick decision whether to trade them or not. From the other hand, it is almost impossible to monitor and control such a big number of shares while stock index combines the figures of all shares and reacts immediately even for minor changes. Conclusion: almost ready portfolio of securities.
Stock Index vs Stock Trading
Why is stock index better than stock trading? The answer is very simple –considering the fact that index consists of many securities, it doesn’t matter which securities are included in it, it can still characterize the whole market in general or different sectors separately: industry segment, segment of a certain class of securities etc. Due to this, it is much easier to determine index direction rather than direction of dozens of shares.
No matter which asset you choose for trading (index, currency pair etc), you will need minimum two weeks to monitor it. If you see, that you understand the price movement for a chosen asset, then you can easily start trading. If this situation doesn’t happen, then it would be better to opt for another asset.