Investing in the stock market has always been a kin to gambling with the exception that researching can increase a person’s odds of a positive outcome. However, the problem has been that with the undefined potential gain, there was also an undefined potential loss. 60 second binary options are a relatively new trend that has eliminated this degree of uncertainty.
First, binary trades work on a simplistic concept. The investor sets the amount that he or she is willing to risk. Then he or she states whether the stock price will be above or below a specified valued at the lapse of minute’s time. If the investor has predicted correctly, then he or she is paid the profit amount agreed upon at the purchase of the trade. One should note that the profit amount does not increase or decrease in correlation to how large the gap between the specified value and actual market value in the favorable direction became. Furthermore, the profit is a fixed return on the initial investment to which the investor agreed in order to be able to definitively know what the potential loss of the investment will be at the time of purchase.
The strong appeal of this type of trading is the all or nothing payout after a very short increment of time. In addition, this type of trading does not require that the investor formulate any sort of exit strategy in the event that a profitable stock investment beings to go south.
While the utilization of binary trades is not a new occurrence on the stock market, 60 second option trades were thought to be virtually impossible. Reasoning for this was that none thought the speed needed to pass information between all necessary parties could be attained. However, the advent of platforms for web-based trading allow for real-time data streaming affording the speed necessary to perform the 60 second binary options in the complex transaction and derivative markets. Therefore, fast moving markets have greatly benefited from these short expiries binary trades because they boost the influx and out-flux of traders. With this constant flux, the prices are constantly changing drawing more attention from short term traders that are looking for this type of finite risk investment.
The return on a 60 second binary options can be as high as 81 percent. With the profit being that great, it is easier to see why investors would be attracted, but also why there needs to be measures to ensure that this new trend in trading does not prey on individuals that have issues with gambling. Most sites that offer 60 second trades will limit the amount per trade. However, if the limit is $100 per trade there is still the potential to lose $6000 in one hour. Conversely, there is the potential to gain $4,860 in an hour.
Therefore, when looking into binary trades research and understanding how much an individual can afford to lose are the keys to ensuring that this is a sound investment option.
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