Digital options, also known as “binary options” or “fixed return options” are alike to traditional options in many ways but also differ in some very significant ways as well. Digital Options are really the simplest trading instruments, requiring no exceptional knowledge of or experience with trading on financial markets. Of course, superior knowledge of markets and trading does often lead to superior results, but it is certainly not a prerequisite to being a profitable digital options trader. In this brief article we shall touch on both some of the advantages and disadvantages to trading digital AKA binary options.
Digital options (Binary options), similar to traditional options, are available on a large number of underlying assets. Stocks, indices, commodities and currencies are the most popular assets available on which to base your binary options trade. However, unlike traditional options these “exotic” options pay out that fixed known return. This limits the risk and increasing the profits and it isn't at all dependent on how far “in-the-money” the option is. If the underlying asset you traded is higher than the strike price by so much as one pip/tick then you are paid out the same high returns as if it finished in the money by 100 points. Magnitude is irrelevant with binary options. This is one of the most appealing features of trading in digital options for investors.
There are many Binary Options trading highlights. Most importantly market neutral instruments. Binary options are the quickest and easiest way to trade; not just on the internet, but on any platform. Digital options are strictly limited in risk and only require a small initial investment. The trades does not need to worry about commissions, fees, or other hidden costs because there are not any. You know exactly what your profit margin will be prior to taking your positions. Binary options are available twenty-four hours day seven days a week meaning they can be traded at any time of day or night. Most importantly you can invest in almost any stock, indices, currencies, commodities.Some Digital Options trading disadvantages. You will need roughly a 55% win rate for profitability. Digital options trading can be a great choice for some investors or speculators but as with anything in life it too has both its drawbacks and strengths and isn’t right for everyone. Like any investment there is risk involved.
Binary Options, higher profits than traditional stock trading, less risk than Forex, the excitement of gambling online; If this is not a market that you are taking advantage of, you should be.
To my mind the digital options trading is very risky. I know traders that lost a lot of money. It's not suitable for everyone. I think the digital options trader should understand the markets and have a luck in order to succeed.
ReplyDeleteThis goes with out saying.
ReplyDeleteBinary (Digital) options is a high risk investment, but this is not dissimilar to any other for of investment and much less risky than traditional forex trading.
On the other hand, luck, I am afraid has nothing to do with Binary Options trading. Luck means that there is a predetermined set of odds for a finishing "in-the-money", whereas digital options trading does not have a formulated set of odds. It is an investment made profitable based on the skills of risk management and ability to read the markets.
By adequately assessing the risk of each trade it is extremely easy to maintain and exceed a 70% success rate for trade.
With a 70% success rate you can take a 100% bonus (40x turnover) on $500 deposit make 2 trades a day at $100; in just under 7 months you will have a withdraw able balance of just under $50,000
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