When it comes to options, binary options are a variety which is concerned with the subject of payout. The buyer will receive a fixed payout or nothing at all at the expiry of this contract. There is a set date and time on these contracts. Then, on the expiry date, one must be on the correct side of the speculated price to get a payout. Otherwise, it’s nothing. These contracts tend to have a shorter time-frame than most options.
The binary products give access to foreign exchange and commodity markets, generally speaking.
Advantages of binary options
There are quite a few incentives for anyone who wants to invest in binary options. It is quite accessible for new traders, for several reasons. Firstly, you do not have to make large contributions to use them. You can start off with rather small investments to test the waters. This reduces potential risk.
If you are successful, the profits can be considerable in size. You could end up with a total balance of 190% of your original investment very quickly. Within as fast as 15 minutes, in fact.
Another advantage is the fact that your trades are not necessarily dependent on market conditions. The most important thing is that you adopt a proper trading strategy, which is flexible. Such a strategy should allow you to maximise earnings no matter the market conditions.
Disadvantages of binary options
There are also a few negatives you should be aware of with binary options. For one, the chance of coming across scammers is fairly high. This is because of how accessible the market is and the lack of regulation here. There is really no-one in charge of this sector of trading.
Another problem is the lack of demo accounts in this area. This means that it is hard to try to practice your trading. Thus, the chance of making mistakes when it comes to the real thing is much higher.