Binary options make things simple for the investor, so it's not surprising that many people find trading binary options an attractive investment.
With a binary option, there is a fixed risk, reward and time frame, which really simplifies the variables a buyer must consider. There are just a few decisions an investor needs to make with a binary option: the particular asset, the direction of the price movement, the amount of the investment and the expiration date. It does not matter how high or low a price rises—it's the direction that the price moves that matters. If the buyer decides the price will go up, buys the option, and the price goes up by a mere cent by the expiration date, the buyer receives a fixed, full return on the investment. A profit of 70% can result from a single pip change.
There's no speculating when to buy or sell binary options, and the buyer does not stand to gain any more profit from a bigger price move. The risk and the reward depend on the initial investment. The more money invested, the more a buyer stands to gain or lose, but it's the buyer that determines this amount.
Binary options also don't necessitate a long wait before an investment can pay off. The expiration date for binary options can be hourly, daily, weekly or monthly.
Working with a binary options broker tends to be very fair for the buyer. Brokers do not charge a commission, and binary options trade at the spot price of the asset, with no bid/ask spread. For the buyer, this means no parts of the investment are shaved off in the trade. Furthermore, many brokers offer a small refund for investments that do not pan out.
Basically, binary options don't require as much research or knowledge of finance, and they don't demand a hefty amount of capital in order to pay off for investors. An investor decides how much to invest and picks a direction the price will go, with the option to find out the result within the hour. The decision-making is less complex, and since binary options pay the highest yield of any short term, fixed investment, they can result in major profits.
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