Binary options – a serious trade or risky business?
- Published: Friday, 16 January 2015 06:42
- Written by Stephan
Who wouldn’t like to make a lot of money – and this preferably at home or on the side? Exactly this promise is heard from binary options providers. Is this offer serious or is fraud lurking here? Does the prospect come along with high profits and a big risk? What is there to these speculative businesses and how can I cover my back? bestbinarybrokers.org shows you the most important facts for the safest trading with binary options.
What are binary options? And where are they traded?
Binary options are traded outside of the stock exchange on special online platforms. The quantity of brokers increases constantly. When choosing a broker, one should by all means, watch out for his reputation. Like in all areas of trading, there are also bad apples here. Preliminary information on a comparison portal for binary options is therefore, a must in order to choose a serious broker with a 100% safety.
With binary options, no real items are sold and bought. The future performances of a share are alone the central of trading. Tradable base values are at the same time strong currency pairs, commodities, like for example gold and crude oil, shares and indices.
Like what the term binary already implies, options can be issued in two ways: The trader bets on either a rising or a dropping market price within a fixed time. In principle it is betted – and thus with a chance of 50 to 50.
How does trading with binary options function?
If the trader assumes that the gold price will rise, he issues a call or open option. If he expects a collapse, he issues a put or deep option. The market price is fixed with the start of binary options. In the end of the chosen duration, the market price is compared with that at the opening.
If the trader was right and the price has developed into the targeted direction, where the smallest changes can be counted up to five places after the decimal point, his option is quoted as in the money and he can rake in around 80 percent profit onto his initial input. However, if the option quotes out of the money, because the market price has turned to another direction, the initial input is lost or there is only a low refund. The options’ durations last variedly and they can take from 60 seconds up to several days.
So binary options are serious. How big are the chances for success?
Binary options are no fraud but an attractive financial trading model. The high profits can delude completely, especially if the loss on the effected initial input is limited. Nevertheless, one should bear in mind that the market prices of the base values are liable to constant movements – and thus in both directions. This makes the 60 seconds trading downright exciting and misleads people into gambling. In the case of binary options, self-discipline is more important than economical expert knowledge, in order not to risk too fast and too much.
Apart from the classic call put trading, there are also other trading types for binary options, which are offered in various ranges by the individual platforms. Here, already more background knowledge in political, economic and also monetary policy developments is necessary, in order to be able to deal in the trend or against it. However, it should never be forgotten, that the business with binary options always stays speculative and therefore, the high profits also confront risks accordingly.
Binary options: Easy resources to the multiplication of money?
Basically, profits are made by all means with binary options. The extent however, depends always on the initial inputs.
If the trader for example, issues an option with ten Euro, with the current trading types, he can make a profit of around eight Euro and in an emergency he can even lose his ten. With some brokers, he gets a refund of around 1.50 Euro, but this still resides in the red.
And the problem lies precisely here: The trader’s personal responsibility is extremely questioned, since the temptation of making a profit of 80 percent within a minute is big.
Binary options: Caution and prudence are questioned
Binary actions are consequently by no means suitable to earn a quite simple and easy, enormous income. It is as always in life: When a trader is not authorised a profit and can put bigger sums, substantial income returns are of course, possible – but also losses. In order to find the fastest remedy out of difficult, financial situations, this speculative business is by no means suitable! The risk that the initial input might also be lost, is just simply too big. Who acts cautiously and acquaints himself with the matter, in which he uses a free demo account for practise and is aware of the diverse seminars and then operates prudently with his initial inputs, can definitely have successful results.