What is so special about binary options trading? You may be asking this very question. The uniqueness of trading binary options is revealed by exploring the word “binary” itself, which represents ‘zero’ or ‘one.’ “Binary” here represents the method of trading where the only possible outcomes are win or lose. In other words there are only two outcomes possible. It is for this reason that they are becoming increasingly popular and that analysts are forecasting that volumes will soon surpass those of the current on-line foreign exchange transaction volume.
Simplicity & Functionality
Binary options trading offers the investor high returns and, because it is mainly conducted on the internet, investors can trade binary options from any computer or smartphone which has an internet connection. This provides you with the ability to invest in a financial asset in a much simpler way. The upside for you is that you, as a trader, don’t have to wait long for the results of your trade to be known. Trading is simple. It’s low risk, and it’s an exciting experience. Plus, it has the potential to make you a lot of money. The risks in comparison to other financial markets are very low and dependent on the way you want to trade. You know from the beginning of a trade how much you have invested, and how much you could lose if the trade goes wrong.
Unlike the trading platforms using traditional trading methods, the binary options trading platform allows you to choose three of four ways to trade a binary option. In the foreign exchange, stocks, and commodities markets, you can only buy or sell the asset. However, with binary options you can choose four ways of trading. You can choose to buy a simple “Call” or “Put” for an expiry period of anywhere between sixty seconds, an hour, or several months.
- Risk Management
Finally, for certain assets, many trading platforms offer the investor the chance to sell the option prior to the expiry time, so if you, as a trader, see your option is in a losing position, you can sell it for less of a loss than if you held the option until expiry, or you can sell it when the option is in-the-money, and take a percentage of the potential profit rather than waiting until expiry.
This is why binary option trading is special. It is simple, it has a low risk, you know your potential profit of loss from the beginning, it is short term, and there is a variety of ways to actually trade.