Binary options trading is a fast growing investment opportunity with more and more people trading every day. Likewise, the number of websites offering binary options trading has grown considerably with increasingly competitive start-up offers available. If you’re considering binary options trading as an alternative investment strategy, you may want to read on to see why this approach has grabbed so much attention and discover the earnings potential it brings.
Profit earnings made within the traditional investment market typically come from high risk/high profit investments or low risk/low profit investments. In other words, the higher the return the more likely you’ll lose all of your money. A binary options trade offers that rare opportunity to earn a 65 to 71 percent return without losing all of the money you invested. The underlying asset being traded ultimately determines the size of the return you can generate.
Unlike, stocks, commodities, currency or index trading, binary options have more to do with predicting how an asset will perform in the market. This means you’re not actually buying into the asset; you’re just determining how well or how poorly it will do within a set period of time. The trick to working the binary options market has to do with studying how an underlying asset performs in the market.
Unlike traditional investment models, low risk doesn’t necessarily translate into low profit potential within the binary options trade market. The majority of websites offering options trading offer a 15 percent safety net return – also known as a reverse option return – for options that expire “out-of-the-money.” Out-of-the-money means your prediction didn’t pan out. These types of trades are commonly known as “Call” or “Put” options.
So, say you invested $3,000 in a trade that offered a 70 percent return on your investment amount. If your option expires “on-the-money” or as predicted, you’ve just made a $2,100 profit. If it expires out-of-the-money, you still get a $450 refund as opposed to losing the total amount invested.
Quick Learning Curve
Mastering the ins and outs of stocks, commodities and indexes can take years of study, not to mention the lost revenue from trial and error attempts. With binary options trading, much of the complexity and time investment is eliminated. So you don’t have to be a financial markets master to make money in the binary options trade market.
Being able to predict the direction of a market is all it takes to get the hang of options trading.
The type of underlying asset you’re trading determines which market to follow. So if you’re trading gold options, spending a couple hours reading up on gold in the financial news sector will give you a good grasp on how to work gold options. The convenience of going online and making a trade in a few clicks makes it easy to get a feel for options trading.
Small Time Investment
A binary option investment can be over and done within a matter of hours or days depending on the expiry time you select. Expiry times determine how long an option stays in play. The trick is to predict what the market value for your underlying asset will be by the time your option expires.
Investors who’ve traded binary options for years swear by the one hour expiry time limit, which makes sense since the shorter the time involved the less likely the market will see drastic fluctuations. So there’s no waiting for months or years to see if an investment pans out. If you’re prediction proves correct, you earn a hefty return with little to no time investment involved.
Most options trading sites give out bonuses to members who trade on their sites. Bonuses are made in cash. Bonus rewards may be offered whenever a member makes a deposit or trades on certain days of the week. Some sites may even offer you a better return rate for a limited time for trading options on your favorite underlying assets.
Free Account Registration
Cost-wise, binary options trading requires no out-of-pocket fees for broker or adviser services and there’s no commission payments to cut into your profits. Most sites offer free account registration so it’s best not to deal with sites that require a registration fee. Any and all profits made are yours to use as you please.