Is the hype around Binary Options worth your time?


#1

In simple terms, when buying a binary option you are making a bet that a certain currency or any type of other asset will either increase or decrease in its value. The payouts usually range between 60% and 90%, while you are risking to lose a full size of your bet. Unlike bitcoin trading, with binary options you are less likely rely on the pure nature of luck, to be successful in the financial market you are required to strongly analyse the charts from both technical and fundamental perspectives.

New developments which came with binary options;

  1. Access to many markets

When it comes to binary options, traders can access multiple markets and trade various asset classes from a single online binary options account provided by such companies as TorOption.

From a single platform, it is now possible to trade stocks, foreign exchange, international stock indices as well as a variety of commodities including energy, base and precious metals, and agricultural products.

  1. Easy and simple to trade

Every binary option bet has only two options: Buy (Call) or Sell (Put). This makes it simple and easy to trade many markets. With only two options, traders can concentrate on figuring where the prices of assets are going rather than going through complicated trade execution and trade management steps.

Once a trade is opened, there’s no need to close it, it will close automatically once the time period is over
3 . Fast payouts

Once your binary option bet expires, and you bet in the right direction, you’ll receive a payout, which can be as high as 85%, or even more. As a result, it’s possible to make 85% on your bet in few minutes!

Before entering a trade, you’ll see the payout offered. This way you’ll know exactly what gain is possible in advance. This is not possible with more traditional forms of trading.

4 . 24-hour trading

It’s possible to trade binary options 24-hours day since these are international markets. This is especially good for those who work during the day. On the other hand, if you want to trade stocks with a regular broker, the market may already be closed by the time you get home.

Trading during extended hours can be a benefit when major events are developing. You don’t need to wait for many markets to open to start betting.

5 . No commissions

When you trade stocks with a traditional online broker, you pay to a commission to enter and exit a trade. On a binary options bet, there are no commissions. You simply bet and expect a payout. If you are wrong, you lose your bet but don’t pay a commission.


#2

I think some of your points lend themselves to answering “why?” have Binary Options become popular-ish with Smart Contracts and in software engineer circles.

As an example, https://augur.net/ has been a stand out project within the https://www.ethereum.org/ community. Augur pitches itself as a Prediction Market, and a Forecasting Tool. When it is truly, simply, just a Binary Option trading platform.

When you look at building a trading platform, Binary Options are one of the most simple types of financial instruments to code for.

There is essentially only one asset type, as both Buy/Sell (Call/Put) sides of the market are trading against the exact same price point in the market. This means you only need to code for a single orderbook. This is not the case with true Options, where there must be an external data feed connection to some Underlying asset market (like a stock/bond/mortgage).

I think Binary Options have their place in the Risk Mitigation environment. We see this in the Insurance Industry being called Parametric Insurance. I think the binary approach will increase in popularity within the Risk Markets.


#3

@KarmaCoverage thank you for the response.Do you believe they will gain popularity a the previous assets and be used by instutional trader ?.


#4

I am not real sure what you are asking here…

I think one driver of increased popularity will be the simplicity to write the code.

English/American style options are not impossible to code, but their pricing has to include some dynamic real time-ness connected to the underlying asset, which binaries do not require.

Binaries only require checking the underlying asset’s price at a single point in time, at expiration.

Surely there will be other drivers of popularity/unpopularity so where the balance plays out, idk.