Forex vs Binary Options
Binary options are becoming popular.
Some people think that its easy to make profit in Binary options than in Forex.
What do you think?
The good or ill of a man lies within his own will. – Epictetus
This is a nice question.![[aww]](/themes/default/images/smiles/aww.png)
I have traded option before but not much as I did trade Spot forex. The problem with option these days is the volatility which increase your cost when you buy or sell option. The more closer you get to the market price the highier perimum that you pay.
ER
A point quoted in favor of Binary Option is Reward to Risk Ratio.
They say that this ratio is much higher in Binary options as compared to Spot forex. You normally get 5 times the invested amount if you win in binary options. Whereas in case of Forex it is very very very rare that you get 5 times the investment in 1 trade. Most of the times if you trade with high leverage, you get 2x or hardly 3x. But Binary options easily allow you to get 5x each time you win.
I just reviewed the above and I have written it here. I dont know if it is correct or not. Please give your opinion on this point too.
The good or ill of a man lies within his own will. – Epictetus
Binary Option is a type of option where the payoff is either some fixed amount of some asset or nothing at all. For example, a purchase is made of a binary cash-or-nothing call option on XYZ Corp's stock struck at $100 with a binary payoff of $1000. Then, if at the future maturity date, the stock is trading at or above $100, $1000 is received. If its stock is trading below $100, nothing is received. Though I'm much more comfortable in Forex.
i dont think it is very easy as you said but this is similar to other fanincial instruments thats why when someone shift to trading those then he feel some comfort in it.
http://www.xynafx.com/ Xynafx ... fund managers and forex signal service providers Minimum investment for our Forex managed Account service is $2k that will be managed individually in one investors account. XynaFx signals As low as $26 per Month.
Binary Options Brokers Reviews, Ratings, Comparison & more - check it out
www.simtx.com
Another layer of complexity to learn in forex - tough enough trading spot
Originally posted by benten10Binary Option is a type of option where the payoff is either some fixed amount of some asset or nothing at all. For example, a purchase is made of a binary cash-or-nothing call option on XYZ Corp's stock struck at $100 with a binary payoff of $1000. Then, if at the future maturity date, the stock is trading at or above $100, $1000 is received. If its stock is trading below $100, nothing is received. Though I'm much more comfortable in Forex.
I think binary options do not work like "Win all or loose all" way. It depends on results. They even pay you back a percentage of amount if u loose. Similarly you do not get a fixed amount if you win. You get variable percentage. I havnt read details of binary options. It looks like that profit or loss depends on how much pips market went up or down from a specific point.
Copied from IGindex - read away!
Types of binary
Ladder
A binary bet on whether the underlying market will finish above a stated level. For example, a 'FTSE® to be Above 5400' Ladder will settle at 100 if the FTSE® finishes the day above 5400 and will settle at 0 if the FTSE® finishes the day below 5400.
Target
A binary bet on whether a market will close the day in a certain range. For example, ‘FTSE® to Finish Up 10-20’ will close at 100 if the FTSE® finishes up between 10 and 20 points from the previous days closing level.
Hi-Lo
A binary bet on whether the day's high or low will be a given distance from the previous closing level.
OneTouch
A binary bet on whether the market will touch or go through the barrier level at any time before the stated expiry. The market will settle at 100 if the level in question is breached before expiry time and will settle at 0 if the level is not breached before expiry time.
Tunnel
A binary bet on whether the market will stay within two given barrier levels for the full period up to expiry. For example a ‘FTSE® 100 Tunnel’ will settle at 100 if the FTSE® stays within the +100 / -100 range for the whole trading day, but if it hits up 100 or down 100 at any point during the trading day the bet will settle at 0. Therefore when you buy a tunnel you are selling volatility and when you sell a tunnel you are buying volatility.
I think if we can predict the market than we can trade options the best thing for a trade is he learn to trade forex and make grip over his analysis after that when he make the analysis with that he can trade both forex and options.
Most of people think that options are a part of gambling and many option broekr are doing so, we must select carefully that a broker who trade option in physical market.
Game is not over Till it's Over
I honestly think that hardly any retailers truly trade anything physically on the market. Most small lots are taken internally as opposed to placed on the open market.