It is a type of option in which the payoff can take only two possible outcomes; either a fixed amount of money or nothing at all.
Although binary options are quite easy to understand and function, they are quite different from standard trade options as well. They have an entirely different method of payout, liquidity structure, fees and risks, investment procedure.
The reason as to why this trading is considered simple to use is because a trader only has to make one of the two decisions i.e. YEs or NO. Thus are become more and more popular as well.
This is the reason this trade referred to as “binary.”
Investopedia defines Binary Options as:
“A type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money or nothing at all if the option expires out of the money. The success of a binary choice thus based on a yes/no proposition…”
Reasons to invest in binary options
There are many reasons as to why people are investing more and more in this kind of trade. However if you wish to invest in binary options, you must first understand all the aspects of all or nothing trade.
If you have traded before then, it won’t be that hard to you as many of the rules apply to stocks are used to binary trade as well.
Keep in mind, that there are certain amounts of risk in this kind of trading but the rewards overcome them.
Here are some reasons why people are choosing to invest in binary option:
1. Knowing all possible risks and rewards
As the name suggests there are two possible outcomes to binary trade whereas in any other trade, there are an unlimited amount of results that could arise from the investments you make. In this kind of business, you know exactly what you’re risking and what can be positive the results. And hence, the binary traders know exactly what they’re putting their money. However, the binary traders can’t lose more money than they have invested.
The fact that in binary trading has only two possible outcomes, it gives more time to make the right decision.
2. Huge Returns Even if You Lose
There are several methods of investing, and not all of them give returns even when you’re wasting.Similarly, in binary options, there are levels of risk at which one can lose their investment. However, if you want to invest in binary options, some binary trading brokers will offer a % age of money that you have invested even if you lose the bet. For example; if you make an offer in your favor, but it didn’t go that way, you will still get an amount of 10-15 % of what you initially invested. Huge Returns!
3. A binary options trading is Fast and exciting!
Unlike other trades, a binary options trading is less headache and much more exciting. The reason that it is so quickly, investors find it a fun and exciting opportunity to trading. We’re all humans, and we all love a bit of enjoyment rather than annoying and stressful investments.
4. Variety in the type of internationally traded assets
Since many binary options brokers are offering different goods, there are also some who will lie. So, before starting to invest in binary options, you must first acknowledge yourself because you will have to select the type of financial asset for you.
There are quite a lot of trading assets that can provide an excellent way to diversify the risks, allowing investors to control the amount of risk that they can handle at a time.
5. Quick and easy turnover rate with high rewards
As compared to traditional investing methods, binary options have a faster turnover rate offering an immediate payout. property Differing from asset to asset, binary options can have an expiry time from 15 minutes up to a week. This rapid turnover along with the high return rates makes it a highly profitable trade.
I’m not a professional of binary options trading, but as far as I know, a type of trading which has only two outcomes yields more time in investing and making the decision which is extremely beneficial in today’s fast paced world. The fast, high turnover rates make binary options trade extremely simple and highly profitable.