What is the difference between binary options and regular options?

Posted By Robert On Friday, August 15th, 2014 With 0 Comments

If you buy a regular stock option and it expires under the strike price you bought, IT WILL BE WORTHLESS and you will have lost your entire investment. The only difference is that with stock options you’re actually buying the right to purchase stocks and you can exercise that right upon expiry. You can also sell your stock option at a profit or loss on the stock market with stock options.

With binary options, you get a predetermined payout if your option expires in the money, but almost nothing if it expires out of the money. With binary options, you get the same payout if the stock is 0.01% higher than the strike price upon expiry and if it’s 200% above expiry. With stock options, your profit is exactly the difference between the stock price and the strike price upon expiry x 100 (one stock option is usually for the purchase of 100 stocks).

The bottom line is that the stock market is risky. Whether you’re buying stock, stock options or binary options, they’re all risky. If you know how to trade the market and can perform technical analysis, you can make a lot of money with both. Binary options generally require less capital in order to profit, and are just as risky.

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