One of the advantages of trading binary options is you have the flexibility to choose which assets to trade. If you are a seasoned investor in one of these asset classes, this simply means that you can leverage your knowledge and experience to your advantage. On the other hand, if you are keen on investing in a specific asset class, binary options trading is a good start-off point for you to learn and understand that particular asset.
In binary options, assets that are traded are classified into four: stocks, currencies or forex, indices, and commodities.
Many consider the foreign exchange market as one of the most liquid markets in the world with over $4 trillion traded daily. Essentially, an investor selects a currency pair and profits by comparing the performance of each against the other. For example, a Euro and US dollar pair will be annotated as EUR/USD, with the Euro as the base and the dollar as the quote. In this trading pair, the movement of the Euro is of particular interest to the trader.
But what are the advantages of forex binary options over conventional or spot currency trading?
Many traders have profited immensely from conventional forex trading. However, this did not come easily as most currency investors put a great deal of time, money and effort into learning the ropes of this investment platform. Certainly, if you wish to learn how to trade currencies, you will not be able to master it within just a few days. Apart from studying particular currencies, seasoned investors are also familiar with the economic factors that influence the movements of the market.
With binary options trading, everything is simplified. A new investor can practically begin trading with binary options in just a matter of days. All he needs is to have a basic understanding of the trading platform and to be diligent enough to do careful research. Apart from the less complicated trading structure, the barrier of entry is fairly minimal.
Trading currencies through binary options can also be more profitable than through conventional forex trading. With binary options, it is highly possible to earn between 70 to 80 percent. Although that is certainly possible in spot trading, the chances of earning that much is fairly minimal.
Finally, it is possible to earn good profits with binary options trading no matter what the market conditions are. That cannot be said of the currency market as volatility can certainly have an adverse impact on one’s investments.