LIMASSOL, Cyprus, Feb. 4, 2016 /PRNewswire/ -- To investors
experienced in stock market trading, an answer to a question of how
a foreign exchange option differs from a binary option might
perhaps be obvious. But to those who have just decided to try their
hand at trading and are only orientating themselves at stock
markets an explanation of how two options are different might help
define their future trading strategies and determine their future
trading behaviour. At the very least, an account of dissimilarities
between foreign exchange and binary options might help novice
traders decide which of them to choose and in which to invest their
money.
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What immediately sets the two trading options apart is that in
binary options, investors know beforehand how much they are going
to win or lose. Even before investors start betting, the conclusion
of a trade in this sense is forgone for them, even though the
valence of its outcome remains at this moment undecided yet. An end
result of a trade in a foreign exchange option, by contrast, is not
settled in advance. Investors trading in Forex always set
themselves up for a surprise, never exactly knowing how much money
they would either subtract from or add to their accounts. For this
reason, binary options are a safer choice: traders will not find
their funds slipping out of their control.
Another reason why binary options might be preferable is their
simplicity. Trading in binary options is less complicated than
trading in Forex. All investors need to do when betting in binary
options is to predict whether their chosen asset goes up or down.
As its name indicates, a binary option leaves investors only two
possibilities: to press either Call, if they envisage an
upward movement for their asset, or to push the Put button,
if they believe that their asset is going to decline. When
investors bet in Forex, they do not simply theorize about the
future movement of an abstract asset and then make a bet, they
actually buy one currency and sell another. In Forex market, all
currencies are also marked down to the fourth decimal point. This
allows investors to trade currency in micro lots and, thereby, to
minimize their losses, but taking these particularities into
account makes Forex trading complex in comparison to binary
options. Novice traders can easily get bogged down in these details
and lose interest in trading or make a mistake and
lose.
In binary options, traders can also close more deals during a
trading session than in a foreign exchange option. Binary options
leave more room for deals, because, among other variants, it has a
60 second option, which offers a contract expiration period of one
minute. In other words, placing a bet in binary options might take
as little time as 60 seconds. If traders choose exclusively this
option during their trading session, they will, obviously, close a
large number of deals (up to 40) and will win a substantial amount
of money, if they trade successfully. A foreign exchange option
disallows placing so many bets during a trading day. A maximum
number of trades investors have a day are no more than 4. If
investors are interested in more dynamic trading, binary 60 second
options, then, is the faster and livelier way to trade than a Forex
exchange option.
Even though Forex is a favoured trading option practiced by
millions of people around the globe, a binary option, which is
relatively new and less popular, is still a safer and more assured
way to financial independence and profitable trading.
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