As a financial trader, you’ll have several financial instruments to choose from depending on how much you want to invest and the level of risk you are willing to take. Some of these instruments include binary options, cryptocurrencies, options, CFDs, stocks, and Forex. Some traders even put options trading in the same category as gambling. The fact is, all financial instruments bear some level of risks, but this hasn’t stopped people from trading, and some people have made vast amounts through online trading. That’s why it is advisable to approach options trading with an open mind and learn the tricks that can help you get some returns on your investment. Binary options trading is currently attracting millions of online traders globally, and for a good reason.
Below are the top five reasons why binary options are trendy.
Unlike many financial instruments, you can make money with binary options even when the markets aren’t trending. For example, those who trade in stocks can only earn when the stock prices rise and fall. Additionally, the price fluctuations must be in favor of the trader. This is not the case with binary options. With binary options, all you have to do is predict the price movements after a particular duration and invest at the right time. Since the returns from options are fixed, a small favorable change, even as little as 0.001, can enable you to earn up to 90% of your investment.
Online trading requires some learning. It’s not something you can wake up one day and start. Binary options allow you to start small and learn the ropes as you increase your investment amount. You can open a binary options account and start trading with as low as $5. Additionally, opening an options position requires as little as $1. With a return of 90%, it means your $1 can earn you $0.9 within a very short time. Imagine how much you’d earn if you invested more?
There’s no gambling with binary options. You’ll know beforehand the profit you are supposed to make even before opening a trading position. This is good for your budgeting. The amount you’ll earn is a fixed percentage of what you invest. In most cases, you’ll earn anywhere between 60 to 90 percent. Your return will depend on volatility and the assets you are trading. This means individual assets’ returns will change in the day. By knowing these changes, you can decide to sell when you expect the highest returns from your trading platform. The good news is that binary options trading is accepted in the US.
With options trading, you can’t lose more than what you’ve placed on a particular trade. It means you’ll know what you are likely to lose even before you place a trade investment. This prepares you psychologically for any loss you might incur. It means the loss won’t come as a surprise like in the case of stock trading. Another good thing about options trading is that some brokers can allow you to exit a trade before it expires. If the trade turns out to be profitable, the broker will give you a fraction of what you’d have earned, and if it turned into a loss, the trader would then deduct just a fraction of your investment, so you make a slight loss.
Some traders claim it’s challenging to learn options trading, far from it. As an options trader, you’ll have tools and charts you can use to learn options trading. You can also rely on the strategies traders in other financial assets use. If you want to succeed in trading options, you must develop a trading strategy, know how to use indicators, and read charts. If you had traded other financial instruments like Forex, you wouldn’t have any problem trading options.
There you have it. Trading in binary options will give you peace of mind that you cannot get with other instruments. And the most exciting thing about it is that you can start earning in less than one minute. However, if you aren’t sure about starting trading options, there’s no harm in seeking help from experts or experienced traders.