- Posted March 9, 2014 by
Binary Options Trading Increasing In Popularity In U.S.
Binary options trading has been increasing in popularity since it began in the United States in mid-2008. Binary options are also rapidly becoming one of the most prevalent financial trading instruments in the United States. There are many reasons for this.
Very little was known about binary options in 2008 but today, there is a lot of free information and education available to anyone who wants to learn.
Very minimal trading experience is necessary.
Trades can be made from mobile devices and traders do not have to be at their desks to make trades.
Binary options trading provides a lot of flexibility to traders.
The investor typically only needs to guess whether a specific outcome will or will not happen.
There are many different binary options trading strategies to work with.
The more experience one has trading binary options, the better they will usually get at it.
Traders have the potential to earn a very high profit on their investments.
Traders can minimize potential losses by buying both a Call and a Put option.
Financial risk and reward will always be known before the trade takes place.
The trader is the boss and is in total control of his or her trades.
The most successful traders of binary options employ multiple strategies at the same time.
There are usually no fees or commissions with these trades but this can vary depending on the broker.
Traders can trade many asset classes in global markets anytime a market is open somewhere around the world.
The investor needs only a binary options platform in order to make a trade. This is simply a broker and method used by the trader to make a trade. The platform is usually a digital, online platform or broker.
Lastly, as the popularity of trading binary options has increased, so has the number of online digital trading platforms for investors to choose from. Digital options trading implies the online trading nature of the contracts. This is a more flexible trading platform and easier to use than traditional options which are traded on the exchange floors.
As you can see, there are many reasons why trading binary options has become so popular.
What Are Binary Options?
Binary Options are a somewhat new trading type of investment. The traders goal is to benefit from a contract where she or he will make money if one of the only two potential trade outcomes they chose is correct. Binary Options means "two options" and the two options the trade is structured around are a "yes" outcome or a "no" outcome. The trader will earn money if the option expires "in the money" or he or she will earn nothing if the option expires "out of the money". The investor basically guesses whether a specific outcome will occur or not.
According to Wikipedia.org, "a binary option is a type of option where the payoff is either some fixed amount of some asset or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The cash-or-nothing binary option pays some fixed amount of cash if the option expires in-the-money while the asset-or-nothing pays the value of the underlying security. Thus, the options are binary in nature because there are only two possible outcomes." Source: http://en.wikipedia.org/wiki/Binary_options_platform.
In summary, trading binary options seems quite easy to do. The trader just chooses which asset to trade and how much to invest, chooses a binary options platform, a trade type, sets up a time of expiry and executes the trade. If the end result is good, the trader earns a profit on top of getting back their investment. If the end result goes against the trader, they lose the amount they invested.
In addition, Binary Options are derivatives with limited risk, require a low amount of collateral and investment, are relatively simple and straightforward and are an easy method to trade the financial markets. Those are the major reasons why the trading of binary options has increased in popularity since 2008.