Trading in the stock market, whether in binary options or other securities, is a wise investment decision. However, there is a significant degree of risk involved as the future is never certain. Granted, you may have the best binary options broker who knows the way around the stock exchange and who can read the stock market relatively well, but that is no shield against losses. Still, the fact that billionaires like Warren Buffett exist in the stock market is indication that it is possible to become successful while trading in stocks. All the same, it is important to diversify when it comes to your portfolio, whether you are interested in binary options Canada; binary options US or others. Engaging in binary trading is not a barrier from trading in other stocks.
Here are the major benefits of trading in binary options:
- Their return on investment (ROI) is high
Binary options have a return on investment that appears incredibly high at face value, ranging from 60% up to 90% on average. Whereas they can propel you to richness fast if the odds remain in your favour, binary options can also drive you to bankruptcy if the odds are consistently against you. In short, engaging in binary trading is a big risk but when it pays, it does it well.
- The extent of risk is explicit as well as the risk level
From the onset, it is clear to your binary option broker how much money you are risking should the price fail to close in the money for you as the investor. Likewise, it is clear from the onset how much you stand to earn if you win in the binary trading.
- There is often a cushion after losing
Since it is easy for investors to give binary options a wide berth for their high level of risk, many binary options brokers choose to guarantee some percentage payment to reduce the effect of the loss when the price for the binary options fails to close in the money for the respective investors. Many binary option brokers pay back a token of between 5% and 15% of the investor’s sum invested. Officially, as far as the stock exchange goes, the investor is set to lose the entire amount invested when they lose in trade. So the token payment is a form of motivation from the binary option brokers so as to keep the market for the binary options vibrant.
- Even a layman can trade directly in binary options
Trading in binary options is very easy. For one, there are only two options to choose from unlike other types of stocks. In addition, there are different websites where one can access information on the availability of binary options and the exact stock exchange one can trade in. With technology as advanced as it is today, such websites even offer demos that take potential investors through the trading process. Some even provide live chats to help out in a timely manner.
- They are quick earners
The reason binary options are said to be fast earners is that their turnover is fast, ranging from fractions of minutes to possibly an hour. Obviously in this respect, binary options differ radically from other stocks, whose turnover takes days, months and even years. These short turnover spans enable the binary options brokers, and by extension their clients, to trade numerous times in a single day. That creates just as many chances for investors to make profits. To a casual observer, binary option brokers can appear like gamblers; but what they actually do is legal stock trading.