Top 10 Benefits of Trading Binary Options
If you have previously been involved in trading stocks, than binary options will be a quick learning process for you. Many of the same rules that apply to stocks are also used with trading binary options; additionally, having a good knowledge of the market will help you make informed decisions. While trading binary options involves a certain amount of risk, there are also many rewards. Below are the top 10 incentives to trade binary options.
1. High Return on Investment Potential
Due to the higher risk nature of binary options, typically the returns on your investment are also higher. Average returns are typically between 60-90%. This compares to a FOREX trader who would typically realize returns of approximately 10%.
2. Known Risk And Reward – Fixed Risk
You know right up front exactly how much you are risking and exactly how much you will profit if you win the trade. There is no risk of leverage costing your more than the amount you risked on the trade. Only your chosen amount to risk on any particular trade is at risk on that trade. You know exactly how much money you can possibly lose and how much exactly you can possibly make if you win. Binaries are unlike forex. It does not matter how high or low a price goes as long as it closes in the money for you. A single pip in the money is as good as 50 pips in the money. You still get the same payout on the trade either way.
3. Some Returns Even When You Lose
Although binary options produce higher payouts, the risk of these assets is inevitably higher than other investments. To help reduce this risk and make binary option trading more appealing, many brokers offer a small return on the money invested on a losing bet. For instance, on an option that did not go in your favor, instead of losing 100% of the initial investment, you may receive anywhere between 5-15% of that investment back. See our list of brokers for more.
4. Easy To Trade – Not Complicated Like Forex
Binary option trading platforms have begun to cater to investors who have little experience trading this style of assets. As such, websites have become incredibly user-friendly with features such as demo accounts, informative videos and live chat features to answer any questions you may have while trading. You also only have to make a prediction correct out of two possible outcomes. You do not have to worry with stop losses, leverage and magnitude of price movement when binary trading.
5. Fast Turnover Rate – Quick Profits In Your Pocket
One of the most intriguing factors of binary options is the fact that they have a very fast turnover and therefore a quick payout. Although this can differ across different assets, binary option expiry times are typically an hour or less, thus you can trade more options per day and therefore have the opportunity for more profit. Many of the daily binary option traders trade 15 or 30 minute options. And the ones that really feel like gambling trade the extremely exciting 60 second options. You can see which brokers offer the one minute options on this page: http://www.binarytrading.org/60-second-options/.
6. Free Trading Accounts With Select Brokers
With most brokers offering free accounts, signing up to trade binary options has never been easier. This means that all of the money you deposit in your account will go directly into your trades. Keep in mind however, that in order to qualify for a demo account, many brokers require a minimum deposit. Check to see which brokers allow smaller deposits or even free demo accounts. Potential buyers can place as little as $100 into an account and gain access to a full demo account where they can trade with fake money at no risk. A credit of trial money is then awarded in order to help you gain a better feel for investing in these options.
7. Variety in the Types of Assets That Can Be Traded
As you learn more about trading binary options, you will soon realize that there is an abundance of different assets that are available to trade. This provides a great way to diversify risk and allows investors to control the amount of risk they want to take on at a given time.
8. Access to More Assets
In addition to the many different types of assets available to invest in, binary options also allow investors access to types of stocks that would otherwise be too expensive for the average person. Binary options allow for this since you are not investing in the stock itself but just in an overall prediction, thus by not owning a piece of the company, you can purchase the option at an inexpensive rate.
9. Easy For Beginners To Get Started
Whether you are a seasoned veteran when it comes to trading stocks and options or a beginner, there are different types of binary options, each with its own level of risk and difficulty. From simple call and put options to double no touch binary options, you can work your way up to whatever level feels comfortable to you. From vanilla options to exotic options there are a wide variety of trading choices available. Anyone can win and anyone can trade. It is designed to be straight forward for anyone off the street brand new to trading. There are also more complex options with higher returns the experienced experts can trade for big risk, big reward paydays. Something for everyone.
10. Excitement Factor – You Can Make So Much Money So Fast – It Is Exciting
The final reason for trading binary options is the level of excitement it provides. Due to its fast pace and inherent unpredictability, investors will find that, despite the high level of risk, binary options provide a new and exciting option to trading that they can use exclusively or simply once in a while.
There you have it, whether you are more interested in the rational side or the entertainment aspect, binary options have a lot to offer. Once you begin to learn more about them, can become an essential part of your investment routine.