Home Why You Should Stay Away From Binary Options?

Why You Should Stay Away From Binary Options?

It’s easier to lose money in the 21stcentury than to make it. In fact, the internet is filled with lots of scams. From credit card scams to investment scams, the online world is getting less safe every day. One money-losing system which no one a decade could have ever envisioned would be the Binary Options Trading System. You can read more about binary options here.

In just a few years, binary option web websites have gained popularity very quickly. As the days pass, more binary option websites spring up into existence, each one promising the same thing: “binary options will make you a bucketload of cash”. If only money would be that easy to make.

You see, these binary option websites are a type of gambling system. They appeal to people dedicated to playing poker online or those who bet on sports. In comparison to gambling however, these binary option websites stand out in a unique way by presenting themselves as investment firms. But don’t be fooled; they are gambling sites, just more exotic. Eventually, they shut down when regulators come knocking.

Before that happens though, they do a good deal of business. If you search ‘Binary Options Trading Websites’ into the Google search engine, you will find over 900,000 hits on the search results. A couple years ago, you may have found featured ad promotions on Google’s first page which reads something like ‘earn 80% profit every hour’. But Google played it smart and banned all binary options ads. You’ll know why very soon.

Buying Options (Placing the Bet)

These binary option firms let you buy options which are also called digital options, ‘all-or-nothing’ options or Fixed Return Options (FROs). These options trade on stocks and many other financial assets on the foreign exchange.

Indeed, they allow you place a bet (which is basically all binary option trading is) on anything whatsoever traded on the public market. The range of financial assets to trade on varies with each binary option website. Some offer more choices than their counterparts. And some binary option websites provide you with a free guide or e-book that covers the topic of binary option trading. It all seems very professional at this point, so you get sucked in deeper.

So, you’ve somehow opened an trading account with said binary option website. They tell you binary option is a new groundbreaking investment. They use the word ‘investment’ a lot, so be mindful of that. Many of these sites offer their clients a binary option contract that gives them the right to buy an underlying asset at fixed prices within a specific period of time. Who are you buying these assets from; the binary options website, of course. One of the most trusted website here is IQ Options which is also the only provider we would recommend to buy from when you decide to start investing in binary options. You can read the review and traders insights about IQ Option here – if you are a UAE citizen you can find detailed information for IQ Option UAE here.

The binary option firm then proceeds to convince you that they offer a controlled risk on investments on the underlying assets. That is, you stand to earn big if you guess right on any trade. The idea of a low cost investment, convenient DIY trade, and an easy account set-up with a credit card may convince you to start a trade. But the reality is, it’s all a bet. If you guess right, you win a certain percentage on your investment; but if you guess wrong, you lose all your investment. Sometimes, kind binary options websites give you a small percentage of your cash back.

Before you make another trade, here are some reasons why you should quit it now.

Reasons to Avoid Binary Option Trading

  1. It is Super Addictive: Because the amounts you place on bets are quite small, you may feel motivated to trade more until you make a profit. After each trade, you’ll always be left with a feeling of “I’ll earn next time.” Before you know it, you’ve piled up a costly amount of trades— and in one day too. At this point, you may feel too committed to binary options trading to quit.
  1. No One is that Good at ForecastingYou can gobble up the news on economic releases every hour, every day, and you still won’t be knowledgeable enough to constantly predict the future value of a stock or commodity. No one knows if Apple or Microsoft’s shares will rise or fall in the next 5 minutes. No one knows. Unless the companies send out a major press release, you can’t even predict the outcome. That’s what binary options website offers you:the chance to make money off the right predictions knowing full well it’s a game of chance.
  1. Ridiculous Percentage Gains: Consider a binary options website that pays $30 on $50 investment; and let’s say you get $10 back for every loss. Let’s assume you make 100 trades, and win 60 of them; your profit is $1,800. But your 40 losses will cost you $1600. So, basically, you have to make at least 50 successful trades just to break even. It’s ridiculous!
  1. Binary Options Websites Are Unregulated: Yes, it’s all unregulated. The Securities commission doesn’t regulate any of it. It’s all a façade. Now, think, how does this not compare to a Ponzi scheme, but worse?

Conclusion

If after reading all this information, you still want to invest in binary option trades, then that’s fine. But don’t confuse a bet with real investing. Because binary option trading is nothing more than a game of chance; an all-or-nothing bet. There is also an option to let professional traders trade your money – this option is called managed account investment and is probably the most safe option when it comes to this kind of investments.