Advantages of Binary Options (The Pros)
Now that we are up to speed on the basics of binary options, it would help to understand some of the advantages of trading with these new-fangled instruments that are rapidly becoming so popular.
First off, one of their most attractive features is their simplicity. No rocket science is involved here, and you do not have to learn the Black-Scholes model for pricing options! Once you have selected an asset, and the binary option to trade it, all you have to do is make a call on whether it will end higher or lower by the time it expires.
Binary options also straddle a wide variety of assets to pick from. So, whatever your area of expertise, from gold to stocks to currency, you can find a binary option to trade profitably.
Another advantage is that binaries are available across a wide variety of expiries, making them an ideal and very flexible instrument for trading for people already having an existing occupation. With a multitude of short expiries available, traders holding down a day job can tailor the expiry to the time they have for trading.
Apart from the limitation of time, a newbie trade may also be hamstrung due to a paucity of trading capital. Binaries, as compared to other instruments, need very low amounts of deposit. In fact, you can enjoy the benefits and thrill of forex trading using binary options because they need an investment as low as just $10!
Newbies can avoid having to learn and put in place complicated stop loss orders that are a must in, say, forex trading. This is because binary options have an inbuilt stop loss mechanism – you can’t lose more than what you paid for the option! Another advantage of binary options is that you know upfront the amount of profit you stand to make if the trade goes right. That means the risk-reward ratio is writ large before to you, and therefore you can control your losses much better. That speaks a lot for the health of your trading capital!
Another plus is the fact that most binary trading platforms are very easy to understand and familiarize yourself with. They are also very standardized in their basic functionality, even though the look and feel of each platform may have been customized. You don’t need to download a program or install the binary trading platform on your PC. You can trade binaries quite comfortably off the Internet.
So what are you waiting for? Binary options are worth giving a try, considering the above advantages. But then let's take a look on the cons of binary option trading first.