Binary Options Vs Forex Trading

Earn Money Through Currency Trade – Binary Options Vs Forex Trading

The forex market has immense money making potential. There are many people who make bright fortunes trading in forex, at the same time there are plenty with a tough luck. The forex market is highly volatile and chancy, but the fact can’t be denied that the potential to make money is huge and realistic. Many people nowadays want to know more about the benefits of binary options vs forex trade. If you are a serious investor and want to play little safe, you can try binary options, which are comparatively safer and simpler than conventional forex trade.

Like other trading forms binary options too has a strike price and expiration time, but the most distinctive feature in this form of trading is that the traders can receive a fixed payoff.

In binary options the potential return that the trader is liable to receive is known beforehand. You can trade binary options in virtually any financial commodity or currency pair. Binary trade can be done in either direction, ‘Call’ or ‘Put’. ‘Call’ option is exercised when an investor feels that the price of the currency pair would go up, and the ‘put’ option is exercised when the trader feels that the price would go down. A binary option trader is not required to poke all the time towards the ups and downs of the forex market, the trade time is fixed beforehand. The time interval can be as short as sixty seconds or as long as the closing time of the trading day. Binary options once purchased can’t be resold before the expiration time.

Binary options trade is getting popular day by day and the number of forex trading platforms offering this facility is also increasing. All you require is prejudge whether the currency pair price would finish above or below the current market price in a particular time interval.
Binary Options Vs Forex Trade

A binary options trader can put his bet just by sensing the direction of the price movement, whereas in traditional forex trade sensing price movement as well as its magnitude is required.

Binary options have predefined risk and reward values, i.e. the risk and profit amounts are known at the time of staking, whereas there is no such hedging in case of traditional forex trade due to which the risk of the investor remains without any limit.

In traditional options the profit or loss is proportional to the value in which the stock/currency pair price ends at the expiration time, whereas in binary options the investor gains a fixed amount no matter how much high the stock price goes at the expiration time or loses a fixed amount no matter how much low the stock price recedes at the end of the stipulated time interval.

Binary Options vs Forex Trade – Some more facts

Binary options can be utilized in a better manner to take the advantage of certain news events that trigger market fluctuations. By exercising short term binary options more profits can be achieved than placing stop-losses. Binary options can be used as a powerful hedging tool to restrict the losses. For a novice trader, trading in binary options is comparatively easier, more fun and exciting than normal forex trade.

Binary options have lately become immensely popular worldwide and widely traded in European exchanges like Eurex. Unlike traditional forex trading, in binary options you can be assured of getting complete payout even if the price movement is due to a single pip. In US too, binary options trading is becoming popular; this type of trading is currently offered by Chicago Board of Trade.

In many forex trading platforms the term ‘digital options’ is often used to indicate ‘binary options’. Binary options are also known by the term ‘all or nothing’, this means to say that, if your speculation is correct, you receive the entire payout, and if your speculation is wrong, you receive nothing. However, in many cases of binary trading the term nothing means something i.e. even if the stock ends in-out of money the trader can get some amount of payout.

Trading in forex needs a high degree of upbeat speculation and a considerable amount of patience. Binary options are a great way to reap profits at the forex market; however, all deals should be performed with utmost care and meaningful presumptions.