Home Business Insights & Advice Are binary options a good investment?

Are binary options a good investment?

by Sarah Dunsby
24th Sep 18 9:31 am

Have you heard of binary options? If you have, then you know there is more to them than meets the eye. If you haven’t, binary options are a feasible way to make money, but it comes with risk.

There are different opinions about binary options. Some call it a scam because it isn’t technically considered an investment. The actual trading is legal. It is what some brokers do that cause red flags.

Other opinions consider binary options a growing trend in the market for people to make quick cash. Although that is true, binary options is still a risky investment to get involved in. Let’s take a look at binary options trading and is it is worth the investment.

What are binary options?

Binary options are relatively easy to understand – you speculate if the price of an asset you’re investing in will go up or down in the future. The hope is that you buy a stock at a low price and wait for it to increase in price before selling. Alternatively, you buy at a high price with the expectation that the price drops before selling.

A different way of putting it is when you bet on a sports game. Some bets you can make allow you to predict what the difference in score will be (Team A will beat Team B by said score). If you guess correctly, you’ll have a pretty significant payout. If you guess incorrectly though, everything you put on the bet is gone.

With binary options, you’re basically betting on the value of an asset either increase or decrease in a set timeframe (usually around 30 minutes).

Is this a scam?

Binary options are not a scam. Some brokers that deal in binary options are, but the actual trading of binary options is not a scam.

Think of it this way: you buy a brand name wallet from someone, and you pay full price. You later learn that the wallet is a fake. Is it the person who sold you the wallet the scammer or the brand name company? The same can be said for certain brokers that get you into binary options.

Can you make money?

If you’re smart about it, binary options trading can make you a hefty amount of money. However, more often than not, traders will lose a decent amount of money.

If you want to make money, you need to fully understand everything there is to know about binary options. The more knowledgeable you are, you can increase your chances of not losing. You’ll need to do a lot of research into the asset you are watching, especially if you are trading long term.

Some companies help get you started in binary options trading. Something like IQ options allows you to use a demo account to get familiar before you go live on the market. Playing around with trading first is an excellent way to see how the markets work and if binary options trading is right for you.

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