But these yields also carry a high level of risk since in most cases if you fail your forecast you will lose 100% of the amount invested in the operation. That is why they are called as binary options since only 2 results are possible: the success or failure. They are also popularly known as all-or-nothing choices.
The very nature of binary options along with aggressive advertising used by many online brokers have led many people to think that binary options can be a hoax or a scam. In my opinion, binary options in and of themselves do not have to be considered as a hoax since the person who freely decides to invest money in them should know in advance the risks to which he is exposed and whether he wants to risk his money in A product of this nature. What is certainly misleading is any promise of profit or sell binary options as a product that will make you profit easily.
Anyone wishing to invest in binary options should be aware that it is possible to obtain high profits but can also cause significant losses. In other investment products like Forex, stocks, energy, raw materials, the same thing happens, although the main difference in my opinion is that binary options have a much more random behavior:
In binary options you try to predict what the future behavior of the price of a certain financial instrument will be, and this is not a matter of luck, but having to do so in the short term price behavior becomes much more random and difficult to predict. This can make it difficult to make a profit consistently.
The positive opinions of users who invest binary options are often based on some of these advantages:
- Binary options are a very simple financial product to understand: The investor must predict whether the price of a financial instrument will be higher or lower than the current when the option expires.
- The investor knows before starting the operation what will be the profit he can get and how much he is risking to lose.
- In case the forecast is correct, the investor gains a percentage of profit on the amount invested. For example if you are investing € 20 and the percentage of benefits is 90% you would receive € 20 + € 18 = € 38. In other financial products such as forex, the investor, still making a good guess in his forecast, only obtains a benefit equivalent to the variation that has had the price between the opening and closing of the operation.
- In the binary options there are no spreads, commissions, access to liquidity providers, reprisals, The negotiation process is much simpler.
- There are several types of binary options (classical, short-term, long-term, pairs, ladder, one touch, ...) and can be traded in many financial instruments such as currencies, stocks, stock indices, raw materials, ...
- You can only trade in binary options or use them as a diversification strategy or to take advantage of certain moments of volatility in the markets (for example when important economic news is given).
If you want to draw your own conclusions and try to invest in binary options, you have at your disposal a number of online brokers that offer this service. There are also some that offers a free demo account with which to test your investment platform and familiarize yourself with the binary options and their operation without jeopardizing your money: Brokers Binary Options with Demo.