Binary options are, as the name suggests, a financial opportunity with only two possible outcomes: you either win all or lose all—nothing in between. The moving force behind this financial option is in a simple yes or no proposition: Will the specific asset be above a specified price at the given time?
By reading this, one might conclude that binary options are easy, fast, and a great way to make money. But as anyone who has ever tried any self-helping book advice knows, things that look easy and simple usually have layers behind them, which means that knowledge comes in waves.
So what are precisely pros and cons of Binary options? Do the advantages of options trading outweigh the disadvantages?
Disadvantages of Binary Options
Binary options are often more expensive to trade than your regular forex positions. This fact is something that first comes to attention to every knowledgeable trader. The general idea of traders is that if they are investing money and are risking losing it, they want to either invest a lot to make a lot or not make a lot, they will not invest as much. From that perspective, Binary options can be counter-intuitive as they tend to be more expensive. In many cases, they offer a lower payout than if you were in a winning position in the Forex Market.
However, the main disadvantage of Binary options is that losing in Binary possibilities means that you have lost all the money. That’s it. Even if you end up with stocks of lower value than what you purchased it for, you can still sell it at that lower price and recuperate some money. So traders tend to avoid Binary options because the consequences are not something they are willing to accept.
Advantages of Binary Options
So why are people still using Binary options? Why would anyone accept the risk of losing all of their money if their calculations and assumptions are wrong? Well, for every why there is a because, and Binary options are no different. Binary options are pricey and risky, but on the other hand, they do have some features that are always going to be tempting for the traders.
Binary Options are famous for their fast returns. Instead of waiting forever to see your investments grow in size and grab the right opportunity, binary options give you the possibility to make money in a matter of minutes. A lot of traders have decided to accept the risks of Binary options only to have the advantage of making money now and now.
This means that saving time is also one of the significant advantages of this type of financial option. We currently live in a world that has changed drastically, just in the last 20 years. Technology has to do with it immensely. Due to this, traders can now trade no matter where they are or what time it is. Because of this fast pace that this whole planet is in, it is no wonder that binary options became so popular, as it saves you time and gets you where you want to be in a matter of minutes.
Binary Options are, first and foremost, a financial option that is not inherently good or bad. Its nature lies in the trader and his ability to take advantage of the system. Pros and cons here don’t show if the binary options are worth using or not; they are here to understand them better so you can see if they are worth it to you. Some people don’t mind making a long term investment if they know they can back out at any point. At the same time, others love making quick money using their traders’ knowledge. Do your research, make your priorities, and understand what is more worth to you and decide. What are you waiting for?