Binary Options: Easier Than Stock Trading
7 Ways Trading Binary Options is Easier than Trading Stocks
When I was growing up, I always remember that when parents, relatives, and their friends talked about investing, they were always talking about stocks. “Investing” and “stock market” were almost synonymous to me. That probably is not a universal experience, but I am guessing it is a fairly common situation. As I got older I realized there were a lot of other financial instruments available to trade and many different ways to trade them. Trading stocks never seemed accessible to me. But trading binary options? There are a lot of ways in which it is easier than trading stocks. Here are some reasons you might want to consider binary options as an alternative to standard stock trading:
- You can still trade stocks—but you don’t have to.
If you want to trade stocks with binary options, you can. But you can also choose from indices, futures, and currencies. I never found stocks easy to follow. Each company has such a unique situation, and becoming an expert on those situations isn’t easy. Trading currencies or futures always seemed a lot easier for me to understand. Not everybody feels that way, though, and many people find stocks very intuitive. If you do not want to keep up with a lot of different stocks, you will find plenty of other options you can trade in futures and currencies. But if you do want to trade stocks, you still can, on a simpler, easier platform. You get choices, and the more assets available to trade, the pickier you can be about the best setups.
- No commissions.
One of the reasons the stock market is inaccessible to a lot of traders who do not have a lot to invest is the fees. There are usually fairly expensive commissions associated with making trades. You pay them whether you win or lose. That is a lot of money to make up for with each of your trades, and it means there is no such thing as a breakeven trade. To make up for the commission, you have to at least win that amount.
With binary options, you have no fees and no commissions. You also have no spreads. Do make sure that you check for fees associated with your account which are not related to trading. Some brokers have fees for withdrawing more than one to three times per month. Others may charge for wire transfers. Most of these fees are completely avoidable if you know the rules and do some planning.
- Platforms are easy to learn.
There are only several binary options platforms that are used by numerous different brokers. SpotOption is among the most popular. These platforms are extremely intuitive. It only takes a few minutes to learn how to use them, and once you know one, you know them all. Even if you switch brokers, you may very well find yourself using an identical interface.
- Lower entry barriers.
Just as those fees and commissions cause you to risk more on each of your trades, they also add to the challenge of starting up with an account if you are a trader without a lot of funding. With binary options, you can start with as little as $100. It is definitely easier to start with something closer to $500, but the increased flexibility is undeniable. Try starting out in the stock market with $500 doing traditional stock trades. You will quickly find out how hard it is. You can find binary options brokers with minimum trades here.
- You can profit when the market is consolidating.
With traditional stock trading, you can really only profit by buying low and selling high. That requires price movement, and preferably lots of it. Wouldn’t it be great if you could profit when the market isn’t going anywhere at all? With binary options boundary trading, also called range trading, you can do just that. When the market is flat, you can make money simply by predicting accurately that it is not going anywhere fast.
- Get back money on losing trades.
Many binary options websites will give you some money back when you lose a trade. Usually the refund is in the range of five to fifteen percent. Keep in mind that when you win a trade, the payout percentage is probably going to be around 75%. So the house still has the edge over you, but if you plan your money management carefully, you can take advantage of the refunds. They are certainly better than paying a commission every time you lose a trade, even if the payout percentages are not set at 100%.
- Binary options are exciting.
Not everybody trades for profit. A lot of people trade for fun, and as far as that aspect goes, binary options trading is definitely a lot more thrilling than traditional stock market trading. Two- to five-minute options or even 60-second options offer you fast-paced action, and the chance to win or lose big in a very short span of time. For traders who are attracted by the gambling aspect of investing, this can be a thrilling experience. If you want to trade for fun, it also makes more sense to do something like binary options trading, which does not take as much learning just to get started.
Sound exciting? If you have always wanted to invest, but believed most of your life that investing was closed off to traders with small or moderate incomes, binary options trading is great news. You do not have to trade on the stock market to make money investing, and binary options trading gives you an easier, more affordable way to trade stocks and other financial instruments.
Check out our list of trustworthy binary options brokers to get started today!
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