It cannot be questioned that binary options have become an immensely popular trading tool and have in many ways opened trading up to more and more people. However, the way in which binary options works has drawn derision from many quarters, particularly from trading purists who think that binary options are merely a glorified form of gambling.
There’s no doubt the parallels between binary options and casino games is obvious and that’s what makes them so appealing. People like to compete and take risks, which is something forex trading is known for. Just like the best online casino website can provide a platform to success, many of the principles apply in forex trading.
That said, there is no doubt that binary options trading offers many advantages to investors, leading to a sort of tale of two sides, those who dislike, and those who like binary options. With that in mind you may want to begin your own binary options trading empire, so just what are the advantages of trading in this way?
Make a Profit
This is a little bit of a double-edged sword but is still worth exploring as an advantage. Binary options work by giving you a fixed percentage of pay-out, for example 75%, so before you invest in the movement of stock you will know that you lose your money of make 75% profit. You can compare this to a 50/50 wager, but what it allows is the ability to gain a profit easily or indeed lose, but at least you know exactly where you are at the start and end.
Manage the Risk
Following on from the above point is the fact that binary options allow you to control the level of risk. This is because you know exactly how much you stand to lose and so can plan accordingly to keep your investments within controllable limits.
It is an Open Door
You do not need to be a high-end city trader to find binary options accessible because the door is open to anyone. You are not excluded due to share prices, instead you are investing on the movement of those shares, not on the shares themselves, so this means you can be in the comfort of your own home and start investing for under £30.
Ease of Use
Research in any type of investment is vital, and knowing the markets, trends, and in which direction shares may move can be pivotal for success in binary options. However, that does not get away from the fact that binary options are essentially a 50/50 call and you do not need to be living on Wall Street to figure them out.
Are There Risks?
No form of trading is without risk and that includes binary options. After discussing the obvious benefits of this type of trading, it is also worth noting some of the potential pitfalls. Sometimes investors need to pay a higher margin above their entry amount, while binary options – like other forms of trading – are open to fluctuating interest rates.
As I noted earlier, binary options are very much like betting at an online casino. As such, there is some inevitable risk associated with choosing a losing share. However, critics of binary trading point to this too much because the truth is any type of share investment comes with similar risks, albeit over a longer term.