Binary options trading is getting a lot of attention these days as it is becoming popular in the investment community. It is drawing participants from every sector to try their hand at the latest way to trade.
Binary options come in many different “flavors”, such as the “one-touch” option wherein a trader can anticipate that the price will touch a certain level. There are also a range of other options, where a trader can take a position on whether the price will stay within a specific price range. Beginners and seasoned investors are drawn to this new genre, indicating that the appeal is absolutely widespread. This type of investment is exciting, offering within minutes the result of a win or loss.
Ultimately, the best type of trading is the type that fits your trading personality, however if you’d like to venture into binary options, here are some pros and cons to help you make your choice.
Binary option pros:
- Quick payoff potential. You can get 70% or more of your capital back in just hours, if not minutes. Payoffs can be higher and there is always a possibility for a rebate percentage amount if you guess wrong.
- This is the next factor that is appealing with binary options. The decision is straightforward. You can pick your asset class, the expiration point and amount of your position. All that’s left to do is to pick the correct direction where you think the amount will go versus the targeted value provided by the broker. There is no other decision necessary, unless you’d want to take advantage of more complex betting strategies that your broker supports.
- Small budgets can still trade. You can trade without a big bankroll. This is very much unlike other stock brokerages where you’ll need a few grand to get started. This is perfect for traders who are trading on the side and do not want to invest a lot.
Binary option cons:
- High payoffs mean there is higher risk. Short timeframes also mean consistent predictions of market movements will be hard to come by.
- Poor regulation and shady spots in history. As of now, most of binary options brokers are unregulated and this finds it more challenging to find a trustworthy broker. It is best to do your research and strive to find brokers with legit history and good reputation.
- Simple to learn and understand. Arguably, this is considered a con. Even if it’s great to use a trading platform in minutes, it encourages traders to believe that they have all they need to know in order to become profitable in minutes, which is never the case. As long as you have realistic expectations and are dedicated to putting in time to learn this type of investment platform, then this should not be a problem for you.
At the end of the day, binary options trading offers a high payoff potential with risks fixed on the front end – same as with any other type of investment options. For you to be always updated on the latest binary option trading, you can follow Banc de Binary on Twitter and you will also see how they can simplify trading for the modern investor.
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