One reason people keep off some investment is failure to understand what the investment entails, what they stand to gain from it, as well as what the risk involved is. When it comes to binary trading in the US, the concept only began in 2008. At this time, only the brokers and a few investment elites understood what it was all about, so most investors kept to the traditional investing such as trading in stocks and Forex. However, more and more Americans are getting to know the concept of binary options and how it works, and they are seeking out the best binary options brokers to work with in binary trading.
How Do Binary Options Differ From Day Trading?
In day trading, investors buy stocks in one day at one price, and still release them into the market for sale the same day. This means that any profits or losses the investor makes are known the same day. This is a big similarity with binary options as these too are usually traded the same day; investors getting to know what their profits or losses are within the same day. In addition, neither the investor in binary options, nor the investor involved in day trading can forecast with precision if they are going to make a loss or a gain – hence, both taking a gamble in the trading market.
One big difference between day trading and binary option trading is that in day trading, investors can earn a small or big margin, and they can, alternatively, make small or big losses. On the other hand, in binary trading, irrespective of whether you are dealing with an average binary options broker or the best binary options broker, you only have one option; and that is either to win or lose. In addition, when you win in binary trading, you earn a fixed amount of money, a figure known to you and your binary options broker in advance, or you lose a fixed amount, also known beforehand by both you and your binary option broker.
Factors that have motivated Americans to engage in binary trade
- High investment returns
In binary options trading, you mostly rely on good luck to make your earnings. Owing to the high risk relating to unpredictability, the returns are significantly high.
- Prior knowledge of risk level
In binary options, you are certain of the limit to which your risk extends, and so you cannot put out investment capital that is more than you can afford to lose. Similarly, you know the ceiling of your possible earnings well in advance, and investors are happy being furnished with information that helps them make reliable decisions.
- Ease of participation
Even though there is room to engage the best binary options broker, there is also the advantage that many websites that facilitate binary options trading are now user friendly, to the extent that you can learn on your own how to initiate transactions from A to Z. Some even give potential investors room to ask questions via a chat system. It is actually less complex than trading in Forex, where currency price fluctuations are a big factor in the ultimate results.
- Fast payout
Compared to Forex and other assets on the stock exchange, binary options give returns faster; often within the hour. For that reason, an investor can trade severally in the same day, just turning over the same amount of capital. What this means is that you have more chances of earning investment returns with binary options, than you have with other forms of assets.