Pros & Cons of Trading Binary Option

Pros & Cons of Trading Binary Option

Submitted by adil on Wed, 08/06/2014 - 20:00

Here's the Pro's & Con's of Binary Options!

If you have decided to trade in binary options, you should learn about the advantages as well as disadvantages to be faced in the long run. Given below are few of the pros and cons.

Pros of Trade Binary Option

• You can trade from anywhere in the world. All you need is a tablet or mobile phone.
• Get a quick pay off! You can have above 70% on your capital in a very short interval of time. This high payoff is a very attractive advantage of binary options trading.
• Binary options trading is very simple and easy. If a trader has experience in the stock market or forex market, he will not hesitate to move to binary options. Its simplicity makes it fascinating.
• You will have a wide range of companies. You may choose from them to trade.
• You don’t need a huge capital for trading in binary options. You may start from what you have in your account, and trade in a vast market. This is a good reason for the popularity of binary options among traders.
• There are no fees or commissions. The spreads that are contained within the payoff/rebate structure bear all the costs.
• Another advantage is that brokers are offering advanced features for traders who have the most experience. As your experience grows in the trade, there come more chances for you to make success in the field.

Cons of Trade Binary Options

On seeing all the advantages, it cannot be assumed that binary option trading is something like sweet honey. It has its disadvantages, and new entrants in this field must go through them. We have listed below some of the cons.

• It is a must to set a clear goal. If you don’t know where to stand or where your next step will be, it is useless to trade in binary options. If you have set your objectives, possibility of making good profits is higher.
•  Short timeframes restrict consistent predictions of market’s movements. It means that there is high risk. You may lose your entire investment capital in a single bad trade.
• There is no effective regulation because many of the binary options brokers are offshore. They have set companies in places where casino betting is openly accepted. These places are accepted ‘tax havens’ and do not come under any sort of regulatory authority. It means that these companies have no need to follow strict standards hence investors’ money is unprotected.
• Binary options brokers have been reportedly found to siphon off with investors’ money. Some were found to be totally scams right from the start. That’s why traders should be careful. They should choose a binary options broker, with a good reputation, right from the start.
• Some binary options brokers have been observed charging separate fee for depositing, withdrawal of money as well as making trades.

Having knowledge of pros and cons of trade binary options is essential to make success. No doubt that there is money in this type of investment but you may lose your capital in a glimpse. So walk carefully.