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While binary options trading may prove to a highly profitable investment opportunity, traders must be aware of all the risks and potential pitfalls that are associated with the binary options market. The general concept of binary options trading is very easy to understand, even for the most novice trader.
Binary, as the name implies, deals in 0s and 1s, and binary options trading signifies that the outcome of a trade can only be a profit or a loss. Binary Options trading has three major components of trading, the underlying asset, the type of binary options product, and the time of expiry. To enter a trade, a trader must first choose an underlying instrument, select a binary options type, set the expiry time, and enter their investment amount.