Published On: Sat, Nov 17th, 2012

The Advantages of using Binary Options

Binary options enjoy a substantial number of key advantages compared to other investment types including traditional options. This is the main reason why they are developing into the fastest expanding and most popular trading sector within the investment industry today. Their chief benefits are as follows:

Risk control – Binary Options possess a distinct payout and loss structure so that you will always know exactly the magnitude of your potential profits and losses even before your orders are activated. This feature implies that you can evaluate your risk exposure per trade with accuracy because binary options supply you with a built-in risk and money management strategy. What other trading mechanism provides you will such an inherent protection?

As your contracts will define the precise payouts and refunds you can expect to collect at expiration, you will always experience a total sense of security when trading binary options. This is because you will be able to precisely control your risk exposure since your potential losses will not climb with the magnitude of price movements. If you do endure a loss, then you will know its precise size even before your binary option is activated. No other type of investment can provide you with such piece of mind.

Higher profit potential – Binary options present you with the capability to activate large trading positions in underlying assets by utilizing leverage.  As you only need to concentrate on evaluating the direction of price movements and not their size, you will discover that trading binary options is far simpler than trading Forex directly, for example.

For instance, envisage that you conclude that the price of the EURUSD currency pair is about to climb after receiving a signal from your broker. As such, you decide to buy the EURUSD at 1.2800 using a deposit of $200. You are then able to purchase 6 micro lots allowing you to trade at $0.6 per pip.

If you opened this position by trading the EURUSD directly on Forex, then consider that you bagged a gain of 25 pips after 1 hour’s trading. Your profit would be of 25 * $0.6 = $15.

However, if you had deposited your $200 in a ‘CALL’ binary option whose underlying asset was the EURUSD, then you could make a pre-define profit as high as 85% of your investment.

In other words, you would collect a payout equaling $170 if the price of your binary option expires just one pip above your opening price, i.e. 1.2801 plus.

Instant earnings – Using your broker’s powerful mobile and internet trading platforms, you can rapidly respond to all new global and trading events by activating new binary options promptly and with accuracy. This implies that within minutes you have the exhilarating possibility to gain profits as high as 85% of your investment.

Easy to trade –Your trading assessments could hardly be any less complex because you only have to determine in which direction your underlying asset will move, i.e. up or down and select a suitable expiry time. There is no requirement to perform comprehensive research or assess complicated financial reports.

User friendly and flexible trading platform – Your broker’s sophisticated binary options trading platform will be powerful yet instinctive and simple- to-use.  From the coziness of your home, you will be able to trade like an expert knowing that your positions will be processed with speed and accuracy.

You will find that trading binary options is a very easy method to speculate on the stock exchanges compared to other types of investments. As such, you will enhance your chances of earning worthwhile and reliable profits by trading them. In particular, if you register with a premier binary option broker then you will have the opportunity to gain as much as 85% profit on your investment per trade within an little time as 1 minute, even if you are a total novice.

You can augment your profit potential even further and reduce your risk exposure in the process by you investing your time to study and master binary option trading strategies. This is because an extensive range of popular strategies exist which you will find to be of great use irrespective of whether you are a complete beginner or experienced binary options trader.


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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.