Binary options are becoming more and more popular among traders, especially among the “novice” traders, because they are a financial instrument that is very easy to understand and use . But what are the advantages and disadvantages of binary options? Let’s find out together, step by step, starting with the advantages of the Binary Options to end with the Disadvantages of the Binary Options.
Advantages of binary options
Simplicity: this is the main strength of the binary options, because no other financial instrument is so easy to understand and use; in fact with the Binary Options you have only to make a prediction on the movements of the Prices, and you will get the Payout if your prediction was correct or you will lose the money invested if your prediction was wrong.
Possible High Earnings: the binary options are a highly speculative financial instrument, in fact the average Payout in case of correct prediction varies from a minimum of 70% up and over the 500% of the investment made. This means that by investing 100 euro on a Binary Option, you could earn a minimum of 170 euro or even 500 euro and more (The Payout depends on different factors).
Short-term: Binary options are a financial instrument quite “fast”, in fact the Expiry Time for the Binary Options it can be of just 1 minute, up to a maximum of a few days or a week.
Freedom of choice: there are a lot of assets on which you can trade, from Stocks to Indices, commodities and currency pairs, for a total of some hundreds of Assets available(the total number of available Assets vary from Broker to Broker, of course).
“Calculated” Risk: The possible Payout and loss from a Binary Options is already fixed from the beginning, so you will never lose more money than the amount that you have invested in a Binary Option, and you already know your possible earning from a Binary Option.
Disadvantages of binary options
Fixed Earning: If is positive to know how much you will earn before you invest your money on a Binary Option, in case of “strong” movements in Prices is not so positive. Because when there is a strong movement, the price of the asset can greatly increase but with the Binary Options the earning is already fixed: it means that in case that the price of a share of a company rises from $80 to $90, you will earn the same amount of money in case that the Prices was raised from $80 to $81.
Short-term: the downside is the fact that the Expiry time for the Binary Options is usually very short and if you want to operate for the long-term, that is no possible in most cases. Furthermore, the prices in the short-term are more subjected to the volatility.
Need to use external programs for charts: the vast majority of online Brokers, unfortunately do not provide “useful” charts for the Traders, to help them to predict the price trends. Usually (apart a few rare cases) the Charts available on the Trading Platform of a Broker, are similar to the Line Chart and they are too “simple” to help the Traders. Therefore, you are forced to use other charts from another website or Platform, to be able to study the trends in Prices. If you need help with charts, you can always ask professionals from Quantum Code and they will be glad to help you with that.
Binary Options – An Introduction
There are options, and then there are binary options. Traders use binary options on various kinds of financial markets internationally; like many other derivative products, traders make money when they speculate on various assets or commodities and guess right. I do like the qbits megaprofit though. Essentially, with a binary option, you choose a future price, and buy an option based on that guess of a future price. If you’re right, you make money.In other words, you can make a living trading binary options if you can consistently use price fluctuations to your best advantage, insofar as they relate to your underlying traded asset.
Binary options are special in that the amount of money you can make or lose is predetermined. The amount you invest is the maximum you can lose, and the maximum you can make. You might, for colloquial example, refer to them as “double or nothing” options—the way you make money on them is very similar.But this is only the beginning of how binary options work. We recommend you checking Brith Method / Brith Wealth System in order to get familiar with the basics of binary options, since this system offers a detailed explanations which is great if you are beginner.
How They Work
Binary options have another name: “exotic” options. And whereas most options can either win or lose variable, often vast amounts of cash, depending the type of options and the way the market for your underlying asset moves, binary or “exotic” options have a fixed return. For this reason, they are often referred to as a type of FRO—a “Fixed-Return Option.”FROs of all kinds, including binary options, exist and are traded across foreign exchange markets, commodities markets, and stocks (and their related indices). Every type of option, not just FROs and binaries, come with pre-determined expiration dates and a strike price.The strike price refers to the price at which you have agreed to buy or sell your chosen asset at some point in the future—on or before the expiration date, in other words.
Calls and Puts
If you’re trading options, and you have reason to believe that the market conditions are good, and prices are rising, you’ll want to buy a “call” option. Call options make money when you correctly predict that the market will have risen above your chosen strike price by the chosen expiration date and time. You’ll then be essentially buying your underlying asset for less than the current market price, because you had that option. You can then turn around and sell that asset at market price for an instant profit.If you see prices falling in the future, however, go instead for a “put” option. In this case, if you’re right, the market price will have fallen below the strike price of the option, meaning that you can then buy up your chosen asset at the market price, and then sell it instantly at the higher price guaranteed in the option.
More instant profits, provided you guess right.Options in general represent a highly complex way to trade markets of all kinds. There’s much more to be learned about options, so don’t go set up your trading account just yet. There are spreads, long and short positions, and combinations of these for all sorts of market speculations and guesses. The trick is to always educate yourself further when it comes to trading options, as the market is vastly complex and just full of experts trying every conceivable method ensure they make lots of instant profits. Happy trading!
One question that you might have about the Binary Options, it could be this “How to earn with Binary Options?” or this “It’s easy to earn with the Binary Options?”; a lot of people, at a first approach to the Binary Options think that it will be easier to earn with them due to the fact that they are so easy to understand and use. But that is not true. There is no doubt that is possible to earn with the Binary Options; and there is no doubt that it can be faster than other financial instruments (Due to the expiry time of the Binary Options, that is very short). But is not true that is “so easy” to earn using them, because you have to know how to use them.
Advertisement are sometimes misinterpreted
The advertisement that Brokers do, could lead “to think the opposite”. In fact there are a lot of advertisement, in which there are photos of “ordinary” people (As a dentist, a senior, an housewife, etc…) with the slogan “Anyone can earn with the binary options!”; or with a slogan like that “I’ve just earned 1000 euro in a week!” (Or things like that). From these advertisement, people are often lead to believe that is very, very, easy to earn with the Binary Options. Whereas is the opposite; attention, we are not saying that the slogans in the advertisement are fraudulent, but we are saying that they can be misinterpreted. However, to be able to earn with the Binary Options you have to know how to use it properly; as everything. Click here for direct transmission by the Dalai Lama. One of the best software these days is Fitnech LTD, specially designed to meet all the beginner’s wishes and needs, since it is made for rookies in the world of binary trading.
You have to know basics
For example, let’s think to an electrician: if he doesn’t know how to connect the cables or to build an electrical system, do you think that he will work? No, because he doesn’t know how to do his job, for this reason no one will call him or hire him. The same concept can be applied to every job: if someone doesn’t know how to do a job, it’s sure that he would never be able to do in a correct way this job. Also for the Trading, is the same thing: if you want to do Trading with the Binary Options, you have to know how to do it properly.
Therefore, you have to know the basics of the Trading, for example how to interpret a chart, or you have to know the technical analysis, the fundamental analysis, etc… . You have to know all the things related to the trading, to be able to do trading in a profitable way. So, do not think to “jump” inside the world of the Binary Options with zero knowledge about it. Before using any financial instrument, you should learn all the fundamental things related to the financial instrument that you want to trade and all the studies related.
Don’t start without the fundamentals
This is an important advice for you, so that you will avoid “the end” of many other people, that have started to do trading without the right knowledge to do it. You can imagine the result: these people in some weeks have lost all the money invested; so, it’s better for you that you learn before you start to do Trading with a financial instrument (Also with the Binary Options), unless you have money to waste, of course.
100% bonus looks striking, doesn’t it? It means whatever the initial investment was, it will get doubled. It sure looks attractive and there are some companies that offer it for real, however before you jump into conclusions there are few things that you must know first.
Companies provide bonus for first, second & third deposit. Before getting lured to these bonuses, it is better to go through all the terms and conditions related to it. It can be understood by analyzing that, some of the companies offer bonuses but others don’t. A good advice is that while choosing among the companies; do not judge on the size of the bonuses offered. Qbits MegaProfit is one of the good companies that offer a decent amount of bonus, so you might want to check it out here Top 10 Binary Apps.
Claiming the bonus can be real hard in some cases. Extra money has to be invested by the investor to reach a point where he will be eligible to claim the bonus. This special point is called, the rollover. When the company is satisfied that you are indeed a real trader and you are able to keep your account flourished for a longer duration, only then you can easily claim the bonus.
It is no good blaming the broker for not explaining all these things beforehand. All the things are available for the investor to know prior of opening the account. A separate section is devoted to the binary option bonus information, and the responsibility for reading this information rests with the investor. The broker will tell you everything you will ask, but will not tell anything that is not asked to him.
Binary Option Bonus: Taking It Is Your Decision
It is very important to do preparation, for an investor. Planning carefully is the key of not getting stuck. An experienced trader can get a hold of the situation easily, and the bonus comes very handy for him. It becomes extra flow of funds in their account. On the other hand, for beginners or for people who want to make a quick transaction, bonus claim could be tough business. The bonus is added to the money in your account, and one can think of claiming it at the very instance.
Beginners do not require the binary option trading bonus in the initial stage. It is better to learn trading strategy with the money present in the account, instead of thinking about the bonus. If the trader is sure that he can take on the situation, he can go ahead with the bonus claiming procedure.
In some of the companies the bonus can be claimed only partially, at a time. In these broking services a part of the bonus earned can be claimed in a certain time, and this can be the best thing to do. If you are comfortable with the system; investing and know that you have a good opportunity in front of you, to make money, then you can think about binary option bonus and claiming it.
So the moral of the story is, do not get carried away by the idea of bonus offered by a company. Read about the company’s terms and conditions very carefully before taking any action. Most important thing is that, an investor should know about the conditions applicable for withdrawal from the account and see, if one can claim it easily. Go through all types of information before entering the field.
We can already say to you, that the Binary Options are not a scam, but they are a financial instrument that had a strong “expansion” in the last years. Although they are not a scam, you can still find some people that can say the opposite: why?
A false stereotype
Because the Binary Options seem to be too “simple” to use and understand, for this reason they are not considered a financial instrument (Although they are a financial instrument); moreover, it’s possible to earn great amount of money in a short time with the Binary Options, and some people do not want to believe that this is possible, so they “classify” the Binary Options as a scam. This happens also due to the “mentality” of our society: “The more you work hard, the more you earn; the less you work hard, the less you earn”. That’s not true. To earn a lot of money, you should not work hard but work in a smart way; unfortunately, some people think the opposite and for this reason they classify everything that doesn’t “follow” their thoughts as a scam or as not possible. Best website for valuable data is top10binarystrategy.com. That is the main reason why some people say that the Binary Options are a scam (Despite they have never try to operate with the them).
Of course, there are also other reasons why people see the Binary Options as a scam. For example, how can we not mention the people who have tried to trade with the Binary options and, in a short time, have lost everything. Why? If you try to do something (does not matter what) but you fail in this activity, how would you feel? Angry, frustrated, stressed and so on; for this reason you would say to everyone to do not try this thing or activity, saying to them that you have already tried and that you have failed and for this reason they will probably fail as you .
People that have lost their money with the Trading with Binary Options, they will do the same thing; but these people have lost their money because in most cases they had not the “right preparation” to do Trading with the Binary Options (For example they did not know how to interpret a chart, the Technical Analysis, the Candlestick Patterns, etc… ) or in the worst case, they had considered the Binary Options as Betting, so they operated without a strategy and without the right knowledge. It is not a mistery why they have lost all their money that they had invested on Binary Options.
The Problem of advertising
Lastly, we have to say that the Brokers themselves do not make a good advertisement about their products and themselves in some cases. But that is not all their fault. Like it’s the case with Online Wealth Market for example.
Before we go on, just answer to this question: would you click on a banner of a website? Surely no, you would say, because probably you are “afraid” that if you click on a banner your computer is going to get a virus (Or more than one) that will “destroy” or damage your computer. That’s another stereotype. In fact the banners on a website, are just a way (for the website owner) to earn some money, to help the website owner to pay all the expenses related to the website and they aren’t “dangerous” for your computer. Another question: would you click on a banner of a website, that says “You can ear up to 10.000 euro in one month!; Earning up to the 300% of your investment!; Bonus of the 100% on your first deposit!” (And so on) ? As before, surely no: probably you will see the Banner as a fraud. We are saying this, because in some cases the Brokers have these Slogan in their banner; so at a first glance, they can seem a fraud or something like that. But that’s not the true, because they are not a fraud!