The advantages and disadvantages of binary options trading
Posted 5 January 2015
Binary options trading is a form of investment that has been quickly democratized online and through word of mouth because it is an easy way to earn money online. This activity allows a number of novice traders to supplement their monthly income. More experienced traders can even be described as professional traders as they make this investment activity their real business and take full advantage of trading. Binary options represent a real opportunity and a lot of individuals have come to realize this each day as more and more traders are embarking on this type of trading. Through experience and practice, it is possible to excel and achieve financial independence through binary options trading. If you are also looking for profits, we will introduce to you here-below in a few points the advantages and disadvantages of binary options.
The #1 main advantage: High returns on investment
One of the advantages of binary options is their high profitability . In addition to their simplicity in carrying out transactions, they can be particularly profitable. Binary options are known to provide significant returns on investment; a trader who speculates on the financial markets through the classical binary options chooses the high or low option to determine whether the price of the processed asset will be oriented upward or downward. He then determines the amount of money to be invested and validates his choice after seeing the potential return on investment displayed through the platform. This return on investment generally varies from 70% to 85% of the invested amount. The return on investment varies depending on liquidity and market hours. For example, a trader who invests $ 20 in a transaction whose return on investment is 80% and whose prediction has been good will recover his initial investment in addition to a return on investment of $ 16 or $ 36 in total. On the other hand, if the prediction of the trader is wrong and the market heads to the opposite direction, the trader simply loses his invested $ 20, no more and no less.
The #2 main advantage: Quick profits
In addition to offering high returns on investment, binary options trading also makes it possible to earn money quickly . Before making their position on the market, traders get to also determine the maturity of their trade; i. e. its duration and therefore the time during which the transaction expires and the determined gain or loss. The maturities of binary options aim to satisfy all types of traders like those in search of short-term profitability and those seeking gains over time. Several binary options brokers offer trading from 60-second maturities, such as OptionWeb or TopOption. where it is possible to achieve up to 85% profit in just a minute . If this is not fast enough for you, the 24Option broker also offers binary options trading from 30 seconds.
The #3 main advantage: A low initial investment
Binary options brokers are accessible to both bigger as well as smaller investors. Upon opening a binary options account, these brokers have a relatively low minimum deposit that is often set at $100 for the majority of brokers. Regardless of your investment capacity, binary options brokers open their doors by democratizing investment and making it accessible to everyone. Speculating on the financial markets is no longer restricted to the elite nor does it require several thousands of dollars of capital. Binary options brokers do not have this constraint and are very easy to access.
The #1 main disadvantage: Less advanced charts
The primary motto of binary options platforms is simplicity. Because many traders do not wish to bother with graphical analysis, the charts posted online by the majority of trading platforms are very simple. Sometimes the price is represented through a simple line. Binary options relative to Forex charts are less developed. Although this is a positive point for novice traders who are in search of simplicity, it is less useful for the more experienced traders who come from the Forex market and have difficulty adapting to simple charts.
If you belong to this second category of traders and you want to practice binary options trading on Forex charts, be aware that some brokers have managed to update their platforms to meet your expectations! For example, the 24option broker has incorporated Japanese candlestick charts in binary options. Also note that the OptionTime broker offers more developed Japanese candlestick charts than the standard graphics as simple representative lines of financial asset prices.
The #2 main disadvantage: The unauthorized binary options brokers
Since binary options are increasingly popular on the Internet, some companies do not hesitate to embark on this business and come forward to traders as quality binary options brokers. While some of these companies often have no authorization from competent financial authorities, other ones are even the subject of warnings from regulators. While unauthorized binary options brokers must absolutely be avoided, regulated binary options brokers such as the afore-mentioned 24Option and OptionTime are examples of the more serious regulated and authorized binary options brokers that have licenses from financial regulators like the CySEC (EU), the AMF (France), the CNMV (Spain), the CONSOB (Italy) or the FCA (United Kingdom).
Our editorial staff further points out that we have exceptionally negotiated bonuses on deposit with some brokers for our readers. Using the example of the 24Option and OptionTime brokers which we refer to here-above, upon opening a 24Option account a 100% bonus on deposit will be granted. You will also enjoy the same bonus upon opening an OptionTime account whereas these two brokers respectively offer only 20% and 25% bonus to their new traders in normal times.