Binary options are a relatively new style of trading – they used to only be available to select markets. In 2008, the Chicago Board of Exchange introduced binary options to the public. As technology has advanced, and with the development of trading software workable for both desktop and mobile users, binary options trading has become a popular alternative in investing.
Binary options are also known as digital options and all-or-nothing options, and here are the four best reasons (in our opinion) to trade them…
Simplicity. The biggest reason that trading binary options has become so appealing in comparison to trading stocks and commodities is the fact that traders don’t need to pay close attention to the tiny details. Really, all a trader needs to determine is the direction the chosen asset will take before the expiration. For example, is the value of gold going to go up or is it going to go down at the end of the hour?
Although it sounds very much like a guessing game, there are tools that will help you make a more informed “guess,” so that instead of just speculating the direction on the value of gold, you can make an educated prediction and improve your success.
Low start-up capital. You don’t have to have a whole lot of cash to start trading in binary options. If you wish you can begin by opening up an account with an established broker with as little as $100. Using the power of compounding, you can grow your capital by learning as much as you can about binary options, considering trade signals, and most importantly by being patient and disciplined in your trades.
Short-term = less risk. Your trades can last from as short as from 15 minutes up to several months. You don’t have to risk staying in the markets overnight therefore decreasing your risk factor. This means too, that profits can be made quickly.
Flexible options. Trading binary options allows you to get in on several different markets. You can trade an index (e.g., Dow Jones, S&P 500, or Nikkei 225), foreign currencies (forex) as well as stocks and commodities such as gold and oil.
We always recommend learning as much as you can before you begin to trade – make sure you give yourself the best chance of success!