Are Binary Options A Good Fit For You?

In the world of trading vehicles, binary options are one of the newest. In fact, retail binary options trading was actually pioneered within the past 8 to 10 years! While the vehicle is indeed relatively new, it has grown to be incredibly popular over the time it has been available. However, what are binary options, what are the risks, are the rewards as great as many say they are, and how do you decide if binary options are for you? Today, I’ll go over all of that.

What Are Binary Options

As mentioned above, binary options are a relatively new trading vehicle. However, they aren’t like most traditional trading vehicles available today. Instead of making trades and hoping for large gains with little losses, binary options include binary trades. This means that there are only two outcomes. Either you will gain a predetermined amount of money, or you will lose a predetermined amount of money. There is no middle ground.

When trading binary options, the trader starts by choosing an underlying asset. This asset can be a stock, index, commodity, or currency pair. From there, there trader makes a prediction with regard to which direction the asset is headed and how far it will move in that direction over a predetermined period of time. If the prediction is correct, the trader stands to earn gains of around 70% or more. If the prediction is incorrect, the trader could lose the entire investment made in the trade.

What Are The Risks Involved In Binary Options Trading?

As with any trading vehicle, there are risks that you will have to accept when trading binary options. Those risks include…

• All-or-Nothing Proposition – As you can see from above, binary options are essentially an all-or-nothing proposition. As a result, those that lose in the market will often lose big!
• Short Term Trading – By nature, binary options are a short term trading vehicle. Anyone that knows the market knows that when you give your predictions more time to come to fruition, they are generally more accurate. As a result, you will generally need to employ advanced trading strategies to become a profitable binary options trader.
• Regulation – Finally, because binary options are still a very new trading vehicle, the industry as a whole lacks regulation. While there is some regulation, that is only with a select few brokers in a select few areas. However, if you can, it’s always a good idea to work with a trusted, regulated binary options broker.

What Are The Rewards Involved In Trading Binary Options?

Any time there is risk involved, there is reward, and in the world of binary options trading, the rewards are pretty big…

• Large Returns – One of the big rewards in binary options trading is the large returns involved in the process. Most brokers off traders returns of 70% or more on their trades. So, if you hit the mark often, the profits are huge!
• Exciting Atmosphere – As mentioned above, binary options are, by their very nature, a very short term trade. Therefore, the atmosphere is more exciting than traditional trading and investing atmospheres.
• The Ability To Gain In Poor Conditions – With binary options, you’re making predictions as to which way an asset is headed, not purchasing the asset. That means that you have the ability to earn big gains, even under poor market conditions.

Are Binary Options For You?

Binary options are generally the trading vehicle for those who are looking for more excitement. If you are looking for excitement in trading, and comfortable with taking larger amounts of risk in order to achieve larger possible rewards, binary options might just be the perfect investment vehicle for you!