With a short history of just a couple of years, the so called digital options managed to impose themselves as the easiest and most profitable form of trading. But are really binary options the top choice in online trading?
Many say that it’s enough to take a look at their features and you will convince yourself why these options are surrounded by such a positive aura.
On the other hand many experienced traders consider them as a scam and don’t even recognize binary trading as a form of trading.
In the following lines we will present the pros and cons of binary options so we can see the big picture.
Binary options pros include:
– Web based trading platforms which does not require download or installation make options trading accessible from any PC, laptop or even mobile phone with an internet connection.
– The software is usually user friendly with simplistic design and intuitive menus. The options can be purchased with just few clicks whether they are custom-made or default options.
– In binary trading the trader doesn’t buy assets, he only needs to predict the future evolution of the asset’ price. Accordingly the skill and knowledge requirements are at a minimum level.
– The trading offer is as extensive as for forex trading including the hottest currency pairs, most traded commodities, popular stocks and important indexes.
– The return rates are among the highest possible, most brokers offering more than 65% return for binary options that can expire within minutes. This huge profitability is the most attractive feature of binary options, especially for amateur traders because if you can predict the market evolution you can really earn considerable amounts of money.
Here are the cons of binary options:
– The trading is based on prediction, not on purchase so binary options are more like bets on the forex market.
– The instruments available for technical analysis and the charts available in binary trading are much less than in forex trading so it’s more difficult to make accurate predictions.
– Once bought, the expiration time is fixed and the options cannot be closed before reaching it. Some brokers allow the trader to sell options but only 15 minutes before expiration times in exchange for a fee.
– Most options cannot be fully customized, so the trader cannot decide upon important variables such as time and price levels.
As it can be seen binary options have both strengths and weaknesses that are up to trader’s subjectivity so we cannot draw a final conclusion weather the binary trading is the best choice for online trading. Like in any other form of online trading is advisable to be prudent because nothing is sure and all money invested could be lost.