Binary Options: A Brief History and Overview
Binary options have gained popularity over the past few years due to its simplicity and wide availability of underlying assets. In simple terms, binary options may be defined as a yes or no proposition where the trades are based on the belief whether the underlying asset will go above or below a particular value at a certain time.
You might think that trading binary options is new, but it has actually been around for over a decade. Initially it was not available for retail traders like you and me, but the method of trading was well established. In 2008 the market opened up, and binary options trading became one of the most popular new trading methods.
It is one of the most simple trading options available today and this is the reason it has broad appeal among newcomers and traders. Some traders trade exclusively in binary options due to its potential to make huge amounts of profit in a relatively short period of time.
One of the biggest advantages of binary options trading is that a variety of underlying assets are available for trading. For instance, Nadex (authorized exchange for binary options trading in US) offers a variety of financial and non-financial assets for trading including stock index futures such as The Dow, Nikkei 225, NASDAQ-100 and DAX among others. They also offer foreign exchange currencies, commodities such as crude oil, soybeans, gold, silver and others as well as economic events such as non-farm payroll, jobless claims and fed funds rate among other underlying assets.
Pros and Cons of Binary Options Trading
One of the biggest advantages of binary options trading is the potential for quick payoff. The payoff for your investment may be as high as 80% and it can be gained within hours. Also, the total losses are always capped and there is no risk of margin call which is the case with ordinary options.
There are also a lot of auto-trading systems available for binary options, with some of the latest systems listed under our New Signal Services page and our currently best performing systems can be found at the Top Signal Services page. If you want to check if a system is less than reputable, we suggest you take a look at our Scam Signal Services page.
Binary options are extremely simple to trade. No underlying assets are bought or traded when you trade a binary option. It is extremely easy to execute and there are a number of binary options brokers available in the market.
There is no need for risk management as there is no extra risk. Remember that you should never trade with money that you cannot afford to lose. Trading is always risky, no matter how good your system or trading strategy is. Some brokers offer significant rebates on the brokerage amount which means your investment is not a total loss in case your prediction goes wrong.
As far as the cons of binary trading are concerned, you need to take high risks if you want to make higher profits as the profit potential is also limited for a trade. You need to make multiple trades in order to make significant profit. Also, a trader needs to be more right than wrong to make money from binary options trading.
If you want to be successful in trading binary options, it is important you choose a particular underlying asset and understand the factors that drive the trends. The only thing you need to make money in binary options trading is to develop the ability to predict the near-term future trends on the underlying asset.
Binary options trading should not be seen as a get rich quick scheme. It is a financial asset that has the potential to make significant money if you take the time to understand how market works and how you can maximize profits. Experienced traders make a lot of money through binary options.
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