Stock Binary Options
The stock market is one of the most lucrative businesses in the world. If you had bought several shares of a stock like Apple (AAPL) twenty years ago, you could now be a very wealthy person. It was worth less than $50 per share back then, and now it is well over $600. Your money would have increased more than 10 times. But for every stock like Apple that takes off and creates millionaires, there are dozens of companies that go bankrupt or just stay in place. Many others will go up in price, but very slowly–certainly not enough to make you rich over the course of just twenty years. Apple was a rare exception, and although these exist, they are very difficult to predict with accuracy.
Binary options take a lot of the guesswork out of this. They do this because they are short term and they have high rates of return for small amounts of movement. So, instead of waiting a few months to make a decent profit, you can trade a 30 minute binary option, and make around an 80 percent return. String many successful trades like this together over the course of that same few months, and you now have a huge profit sitting in your account.
This certainly isn’t quite as glamorous as finding the next Apple, but it can be even more profitable, and its certainly a lot easier to take advantage of. You can change assets with ease, and you can even stray away from stock binary options if you wish, since it is possible to trade commodities, Forex currencies, and indices all from the same binary options broker. This makes trading a lot more condensed and very simple, and you end up winning out as the trader able to take advantage of this.
It’s a very simple concept. With the call/put option, you simply predict whether the stock will go up (call) or down (put) in price, and then make the appropriate trade. After that, it doesn’t matter how much the stock goes up or down; if you picked the correct direction, you are given the full profit rate stated before the trade was executed. If it’s 81 percent you are given that–even if the stock only moved a single penny in your favor. In this regard, binaries can be much more beneficial to you than the traditional stock market can be.
Of course, the downside to binary options is that in the vast majority of cases, they are an all or nothing venture. If you are wrong in your prediction, you will lose all of the money that was risked. Unlike with stocks or pretty much every other type of trading, though, you are risking a lot less per trade. Whereas with stocks, you would need to risk a few thousand every day to make trading worthwhile, you can get away with risking much less than a couple hundred and still have it be worth your time. Binaries might seem riskier on paper, but the amounts you put up each time are far less, and this helps negate a lot of the risk.
In fact, many binary brokers are trying to account for this discrepancy now. You will now find that there are a few brokers out there that will allow you to end a trade early and take just a partial loss instead of waiting and losing everything. Other brokers allow you to take out a type of insurance on your trade so if you are incorrect, you will still get something back. This usually goes up to 15 percent, so if you risk $100, instead of losing the full amount, you would only lose $85. The downside to this, of course, is that these brokers typically pay out less when your predictions are right. You will need to find the balance that works best for your trading ability for the timeframes you will be focusing on.