In the last few years binary options trading has become incredibly popular with both beginning investors and seasoned traders alike. Click Here to reveal the secrets of the Canuck Method. Many new platforms, robots and brokers emerged, like Fitnech LTD for example. This type of trading is popular since you are not required to have experience in this field. While there are a multitude of reasons binary options make sense, here are five of the top reasons to trade binary options.
Close Control of Risk
Because binary option trading has only two fixed outcomes – a profit of around 170% or a loss of around 85% – the variability of profit and loss that exists in most futures trading is completely removed. This allows investors to carefully gauge their level of risk, with no uncertain exposure possible. Many investors find this to be the primary benefit of binary option trading, since it makes very fine-tuned trades possible.
High Rate of Return
In traditional investing, the degree of profit is related to the amount that the asset price shifts in value. This means that while in some rare cases an extremely high rate of return might be possible, more often massive gains are reversed before a position can be exited, and the net profit is relatively low.
By contrast, binary options always offer the same high level of profit on an in-the-money expiry. Ranging from 165% to 180%, this extremely high level of profit is an incredible draw for many investors.
Even in the world of intraday trading there are few vehicles that begin to approach the high-speed turnover of binary options. With most contracts expiring in less than one hour, and some of the shortest expiring in five minutes, investors can stay constantly engaged and actively in play in the market.
Combined with the lucrative rate of return, this also creates the opportunity for a small amount of seed capital to grow rapidly – if compounded over eight successful one hour trades $100 becomes more than $11,000, a situation hard to match anywhere else in the market.
Easy to Understand
While most financial vehicles – especially in the world of futures options – have a wide range of variables that can be confusing to new and intermediate traders, binary options remove nearly all of these variables, creating a vehicle that is easy to understand in just a few minutes.
All a trader needs to concern themselves with is what direction they believe the asset will close at – the length of the contract is predetermined, and there is no need to worry about exiting a position. This frees up the investor to focus their attention exclusively on what direction they think the binary option asset will move.
Susceptible to Micro-Trends
Because of the short contract lengths, and the fact that the degree of shift in the asset price isn’t a factor, binary options traders can take advantage of very small micro-trends in the market.
Many investors enjoy this opportunity to capitalize on the peaks and valleys that immediately follow a major announcement, for example, before the markets normalize. Taking advantage of these micro-trends is a science unto itself, and can create the opportunity for relatively-safe investments.