Money Tree

Making money using binary options

In the past few years an investment option has arisen on the internet - the binary option. It was named binary because it works by the rule of “one or the other” as it is with the binary system - where one and zero are the only two components - but it is also called “all - or - nothing”, digital or Fixed Return Options (FROs). Here we will give basic information on how the system operates, the possibilities of profit, its beneficial sides as well as take a look at arguments of criticism.

  • Binary options for beginners

These types of investments operate by the principle of “yes or no” which basically means you either choose correctly or fail. The investor  primarily chooses an asset on which the investment will be put - the assets are economic resources which represent a value which can be converted into money; money is an asset by itself as well as stocks, commodities, foreign exchange and other. Then a “Call” or “Put” decision is made - “Call” represents the opinion that the price of the chosen asset will rise from the current rate at the time of expiry while “Put” stands for the decline of the price, the amount of money invested is determined and what is left is to wait for the result. The expiry range can vary from thirty seconds to the end of the trading day. Some brokers for binary options offer a refund rate of usually 10-15% of the money invested and the profits vary from 70-95%of the money involved.

  • Is it profitable?

These kinds of investments are definitely profitable at times. If a person invests 100$ on an asset with 80% profit rate and chooses the correct outcome, a profit of 180$ is made, investment money included.

  • The pro’s and con’s

The beneficial sides to this move are the simplicity of use, the controlled risk which disables losing more than the previously specified amount of money - the investment or the major part of it, possibilities of small investments and the potentiality of big gains. On the other side, this is basically a gambling device. Nobody can predict the movement of prices in a short period of time correctly all the time, not even with all of the knowledge on binary option predictions or on the movement of data which is offered. Additionally, calculations have shown that a person must have a 54.5% of wins all the time just to break even, let alone profit in a long term.

All in all, these options can be a profitable financial operation if used wisely and without much expectation. People get carried away easily by the sound of “investment”, “simple” and “profit” and trust these words to bring quality, regulations and professionalism. In reality, the majority of web sites dedicated to this kind of investment are not regulated in any way and by any organization - the guides to better understanding and predicting of ratio and data are correct in theory but cannot be followed all the way through in this case. Therefore, when using binary options it is best regard it as a low cost gambling opportunity and take care not to become addicted or delusional.