Trading mechanisms of binary options are gaining potential. Risk-reward ratio and return on investment are highly favorable. Conventional investing options such as stocks has a low return on investment and high risk whereas binary options trading offers upto 85% return on investment within hours or even minutes.
Suppose you pick up a asset such as Google, forecast the movement in upward side, that is you buy a Call option of Google. Now at the time of your expiry, if Google shares are higher than your strike price then you are entitled to gain 70% to 85% of your investment. Change in price of asset could be minimal. However, if you prediction turns out to be incorrect, you lose your investment. Hence binary options are also referred as "all or nothing". Binary options brokers are enjoying high activities and high volumes since mid 2011. Expiry periods could be minutes, hours, week or a month. Lots of activities are seen in contracts with shorter expiry period. Returns on investment will remain same irrespective of expiry time length. Risks and reward are predetermined and that is a huge advantage compared to traditional trading mechanisms.
Nowadays all brokers provide a web based trading platform enabling access to trading environment from any place having internet connection. Due to online nature, traders across the world can access trading platform. Binary options are available in wide range of assets such as indices, currencies, stock options and commodities. Availability of financial instruments is increasing with each day. However, very few of them stay for longer term. Binary options, since its inception has seen a huge popularity due to its high return on investment.
Unlike gambling or sports betting, binary options are not a variable of luck. You must be equipped with the knowledge of financial market trends and underlying asset price movement. Traders following technical analysis and price charts have high probability of winning in binary options. Internet has been a huge treasure of binary options broker reviews, learning materials and market trends.Binary options does ensure high return on investments provided that enough knowledge and skills are developed.