Like most people, you may be skeptical when you hear about the supposed benefits of binary option trading. Every form of trading has its proponents and the ones who prefer binary options tend to be very loud and passionate, which means many people are quick to think that it’s a bunch of hype. Make no mistake: binary option trading is nothing to rush into. However, for those who take their time learning how this method works, it can offer the following advantages.
We’ll talk more about this in a minute, but trading options definitely comes with its fair share of risks. Fortunately, it’s also very generous with its rewards. Pulling in a winning option can net you up to 90% of your investment. Even something like Forex typically doesn’t get higher than 10%. It’s hard not to get excited about this kind of potential.
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You Know Your Risks Upfront
While there is no shortage of risks with trading binary options, you have the advantage of knowing exactly what they are before ever making a decision. You know what you’re putting into an option and you know how much you stand to profit. This completely eliminates the risk of leverage adding in extra costs.
Of course, you also know the exact amount you stand to lose if your instincts prove wrong. As long as the price you bet on ends up in the money, you win. It doesn’t matter how high or low it went before that.
Some Losses Are Curtailed
Even when you lose with binary option trading, you can come away with some of the money you invested. This is a tremendous advantage to consider. If you bought stock in company X and it plummeted, taking your entire investment along the way, you won’t see a penny of it once you sell.
With binary options, though, many brokers will give you a small return on your investment. They know the risk is higher than other types of trading and want to encourage you to come back. Some brokers will even repay you with as much as 15% of the money you invested.
Binary option trading is still relatively new. In fact, compared to other forms of investing, it’s practically a baby, having just been introduced in 2008. At first, this meant a lot of trading platforms catered to seasoned investors who came from stocks, Forex, commodities, etc.
Today, though, there are countless platforms and the vast majority of them are geared specifically for the beginner. A lot of people are trading binary options who have never dabbled in anything else.
This means you can find platforms that will make it as easy as possible for you to look for winning options and place your call or put. Many will even provide you with tutorials and beginners’ guides to help you get acclimated.
These are just some of the advantages that are yours when you get involved with binary option trading. Again, start slow and take your time learning how this type of trading works. Once you do, though, the sky’s the limit in terms of potential.