Pros and Cons in Binary Options

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect For Beginners!
    Free Trading Education, Free Demo Account!
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  • Binomo
    Binomo

    Good Broker. Only For Experienced Traders!

Pros and Cons of Binary Options

Binary options are an emerging as a fan favorite among the online trading community, with the novel trading format gaining pace throughout the trading industry. Online brokers are fast picking up this format allowing their users to experience the new and exciting genre of online trading.

How Do They Work

Trading with binary options allows you to trade a wide variety of stocks, FX pairs and commodities with a new twist. Binary options allows traders to choose a product and predict whether it will increase or decrease in value within a given time frame, much like betting. The fundamentals are extremely simple, guess right you win, guess wrong you lose.

It gets interesting when you notice that the size of your loss or gain depends on how much your option fluctuates in price. If it’s a big rise you get a big win, small rise you see a small win etc.

Now that you know the basics, below we’ve listed out the fundamental pros and cons of this format to help provide some insight before you get stuck in.

Pros

Ease of use

When compared to a traditional trading format, binary options are really simple. Traders of any level are able to find it straightforward and profitable as it requires minimal complex decision making. This makes it a perfect choice for all online traders who don’t have the head for other trading styles. You simply select your variables and predict the direction against the value the broker offers, all of which can be done from a single dashboard.

Risk management

Managing your risk isn’t a pressing issue as the level of risk you choose to take can be managed and reined in. This form of trading allows you to apply a risk tolerance depending on the size of each position you take. If your prediction is off and everything goes wrong, you’ll be reimbursed with the rebate amount and will not lose the entirety of the money you risked.

Quick payoff

Compared to most other forms of trading, the return on your capital investment is very quick. Brokers will often offer a payoff on your trade which can sit as high as up to 70 per cent which you can often get your hands on within minutes.

Cons

High risks

Like with conventional trading, if you’re aiming to reap the rewards and turn a higher profit, you’re going to have to put your money on the riskier trades. Big payoffs come as a result of bigger risks. The brief timeframes that you operate in with Binary options also contribute to the high risks associated with the format, along with ramping up the pressure significantly. Market movements will be inconsistent and difficult to predict so you have to strike while the iron is hot.

Few trading tools

Binary options brokers will provide a number of tools and informative materials to aid your decision making. With the fast paced, high risk nature of this format, it’s relatively easy to get caught up in the moment. You may react instinctively without checking your KPI’s (key performance indicators) and end up in a sticky situation.

Binary Options Trading is an interesting and novel trading form that is fast becoming a favourite among online traders. You can give it a go for yourself on a number of online brokerage sites, and see what the fuss is all about.

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Pros and Cons of Binary Options Trading

As a new way of online investment, binary options trading has quickly gained interest among people in South Africa who want to invest and profit from binary options.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect For Beginners!
    Free Trading Education, Free Demo Account!
    Get Your Sing-Up Bonus Now!

  • Binomo
    Binomo

    Good Broker. Only For Experienced Traders!

Thanks to this level of popularity it is clear why so many South African decided to trade with binary options and maximize profit.

Both new traders and professional traders who are experts on forex market are attracted to binary industry due to its many benefits.

To have detailed information about trading process, here you can find out more about pros and cons in binary options trading.

Pros in Binary Options Trading

In this part of articles, we will provide our South African readers information why many traders invest in binary options and what are the main reasons for such popularity of this new online investment industry.

Quick Payouts

A lot of trusted brokers, like Banc de Binary, Opteck, 24option etc offer secure trading platform where traders can achieve high payouts, between 75% and 90%. Binary options industry is known for its benefits available for traders worldwide. it is possible to invest in short term (60 Second option) and long term. Where else it is possible to trade and earn high profits of 80 or 90%?

This is definitely one of the main reasons why traders deposit with binary brokers. With high payouts available, traders can experience profitable binary trading process.

Binary Options as Fast Growing Industry

Binary options started in 2008 as a new aspect of investing. With binary options, traders in South Africa are able to participate on financial market and maximize profit when trading with different assets in predetermined period of time.

Over the years, binary options industry became widespread thanks to advantages it offers to traders. They can select preferred binary broker and explore trading platform in order to trade profitable with the help of many useful trading features.

Binary options trading is available for both experienced traders and also those who are new to this way of online trading. With the help of many education materials and strategies, available on the platform, South Africans have a great chance to profit from binary options.

Simplicity while Trading

These is yet another of pros in binary options trading.

Trading binary options is very simple and shouldn’t present difficulties to people interested in this online trading business. Traders who select reliable broker can experience simple registration and login process.

Trading platform is easy to use and traders can easily navigate over the site. South Africans can check education materials and FAQs to get answers on any topic relevant to binary options trading.

In case of any assistance, traders can contact customer support of particular broker that can provide them necessary information.

As stated, binary options trading is actually very simple and has only two outcomes. Traders have to deposit, select preferred asset type (stock, commodity, currency or index), trade option and expiry time.

Later on, they only have to choose will asset price rise or fall. If traders predict that asset price will rise in predetermined time, it’s called “Call” option, and if they are convinced that price will fall, then we are talking about “Put” option.

Practice on Demo

Demo accounts are considered as an valuable feature in binary trading.Trial versions fall into category of pros in binary options trading. A variety of reliable binary brokers offer demo account for traders in South Africa, such as:

Traders have possibility to practice on trading platform and place trades without having fear of potential risk of money loss. Demo account enables safe trading environment for traders to invest in different underlying assets.

By this we mean that traders are able to trade with virtual money, not real money. Depending on the broker, demo accounts are usually available for limited period of time and broker ensure traders with a specific amount of virtual money.

Demo is excellent way for South African traders to improve trading skills and experience the most for safe trial version. Traders can use different available trading strategies and instruments which can lead to a successful trading process. Later on, when they gain more confidence, they can just switch to real account and start trading binary options for real.

Small Budget for Successful Trade

Small budget is one of pros in binary options trading that can also bring profit for traders.

This industry enables traders to maximize profit without necessity to invest huge amounts of money. That also might be one of the reasons why traders in South Africa find binary options trading as a great chance to increase income.

A lot of broker offer different minimum deposit, ranging from $10 to $250. With this amount invested and properly selected tools and strategies, traders can go far away and earn money in binary options trading.

Of course, it is possible to open account with more than $250. This way, traders can get access to even more attractive trading features and services.

More Influence on Trading Process

This is definitely one of the most important pros in binary options trading worth mentioning. Traders should be aware of the fact that they can know there possible money gain or loss in any moment.

This is why so many traders in South Africa find binary industry as a great way to maximize profit.

Since traders place trades on assets in future time (from 60 seconds to 150 days), they instantly know how much money they can earn or lose. This isn’t like on forex market where risk is much higher and it is possible to lose huge amounts of money.

We advise our readers to diversify their trades. This way they don’t keep “all eggs in one basket”. To have possibility to control their own trades is very important and valuable in the trading process.

Cons in Binary Options Trading

After we have mentioned all pros, now we should inform our readers in other facts that can be considered as cons in binary options trading. It doesn’t necessarily mean that all following facts are negative, but to inform traders to be aware of potential alerts when trading.

The Risk of Scam Brokers

To choose a safe and reliable binary broker is of utmost importance in binary options trading process.

Traders should be aware of potential risk since in binary industry there are over 300 brokers who operate on financial markets across the world.

The best thing we recommend is to carefully read broker reviews and check their platform to see if they offer clear terms & conditions, FAQs etc.

All these information can be very significant because no one wants to deposit with a scam broker, earn money and be unable to withdraw their own money. There are several indicators how traders can avoid scam in binary options and experience only profitable and safe binary trading process.

Risky Business

Let’s not be mistaken, binary options trading isn’t risk free business.

There is certain risk involved, since traders places trades in different assets. Stocks, currencies or commodities are all subject to changes on financial markets, whether we are talking about natural disasters or political situations. So to claim there is no risk and this industry guarantees 100% payout isn’t real.

This is what traders have to always have on mind before depositing with a broker. South Africans should be aware of potential risk involved as well as potential money gain that can be reached in short period of time.

Lack of Regulation

In binary options industry there is a wide selection of brokers who participate on financial market and offer trading services to traders.

Some of them are regulated, while others aren’t. It is important to mention that unregulated brokers aren’t by definition scam brokers.

Regulatory status is a choice and it depends on a broker does he want to have regulatory licence or not.

CySEC and FCA are two authorities responsible for regulation of binary brokers. CySEC stands for Cyprus Securities and Exchange Commission, based in Cyprus, while FCA is based in UK as a Financial Conduct Authority.

These regulatory bodies provide a certain security level for traders since they monitor business of binary brokers. They are in collaboration with EU and brokers regulated by CySEC have to follow European laws and conduct their business in a transparent way.

Binary Options – Pros & Cons

The Good & Bad Of Binaries

Trying to decide whether to trade binary options, try out spread betting, or do a more traditional type of trading in stocks, currencies, commodities, or indices? Ultimately the best type of trading is the type that fits your trading personality, but here are some binary options pros and cons to help you make your choice.

Binary Options Pros – Advantages Of Trading Options:

  • Small Budget Can Still Trade – You can trade without a big bankroll. This is unlike many stock brokerages and forex accounts that require a few grand to get started. With binary options you can open accounts with most sites for a few hundred bucks. This is perfect for many traders who are trading on the side and do not want to invest a lot. We like to say that most traders should start with a deposit of at least $500 if possible. This allows you to utilize better binary money management tactics which is crucial for long term success.
  • Low cost way to trade a lot of different underlying instruments. You can trade stocks to commodities to currencies to indices with binary options. Some brokers offer 80 or more different assets for you to choose from. Where else can you trade and profit from commodities like gold or oil for $10, or even $100. Where else can you trade stocks like apple or google for $20? You can make binary option trades for as little as $1 (where?). This enables you to have access to a wide range of markets, which means when conditions make trading impossible in one, you might find optimal conditions in another. There are many chances to find good setups.
  • Big Returns Possible Swiftly – An advantage of trading binary options is speedy returns. You can make one trade per day and make 75-90% profit if you choose. You could even trade faster expiry times and most people trade 15, 30 minute or hourly options. If you are really feeling the need for fast returns, you can even trade one minute options (https://www.bestfxbrokers.com/binary-trading/60-second-options/).
  • Trade different types of binary options. Many brokers will let you not only trade High/Low, but also do One Touch, No Touch, and Boundary trades. These all offer you different ways to profit in different situations. Boundary trades in particular provide a unique means of profiting; you can literally profit on price not moving in these trades. It’s usually challenging to make money in ranging markets, but with Boundary trades it may be easier. Brokers which offer you rollover and early closure give you even more control over your trades. Option Builder (choose your own expiry period) is also great.
  • Simple to learn and understand. You can learn the basics of how to use binary options platforms in under five minutes. This shouldn’t lure you into complacency; instead look at it as freeing up your time to learn more about how to trade intelligently and consistently using a trading method.

Binary Options Cons:
Make no mistake – you can get burned trading binary options. You should only do so responsibly and with funds you can afford to lose. It’s not all fast money and huge returns. With those returns come risk. Do not forget that.

  • Poor regulation and shady spots in history. Right now so many binary options brokers are unregulated. In other types of trading (Forex for example), regulation is the norm. This makes it more challenging to find a trustworthy broker. We have a few good starting recommendations however, and strive to only list brokers with a legit history and reputation.
  • Tighter restrictions on trade sizes for the big high rollers. Some brokers have no exposure limits, but most restrict you to investing no more than several thousand dollars at a time, which can be problematic if you have a large bankroll and want to move a lot of money.
  • Limited demo testing capabilities. Note that this doesn’t apply to every binary options broker—just the majority. If you were going to trade Forex, you’d find that many brokers give you a demo platform you can use indefinitely. Most binary options brokers seem to skip this altogether, or only provide you with a demo platform you can use for a few days or a few trades. There are a few brokers with less restrictive demo platforms however such as Banc De Binary and MarketsWorld.
  • Simple to learn and understand. Yes, this is arguably also a con. While it’s great to be able to use a trading platform in minutes, it can encourage traders to believe that they know all they need to in order to become profitable in minutes as well, which is never the case. As long as you have realistic expectations and you’re dedicated to putting time into learning what you need to, this should not be a problem for you.
Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect For Beginners!
    Free Trading Education, Free Demo Account!
    Get Your Sing-Up Bonus Now!

  • Binomo
    Binomo

    Good Broker. Only For Experienced Traders!

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Binary Options Guide For Beginners
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