The binary options market is an arena where any trader can gain or lose, depending on the asset outcome in one of two possible scenarios. Trade results are based on the all or nothing game, which encourages some traders to maximum risks in trading. Let’s take a moment to compare binary options examples with the definition of gambling. Is this comparison misleading? The answer to that question is a challenge even to legislators and experts in some developed jurisdictions. However, instead of condemning binary options trading, slightly raise your head and look it as a new opportunity for increasing revenues.
Binary does not mean a game of chance, it is game of skill
Let’s put the cards on the table, what most people do not understand is that binary does not mean 50% – 50% chance. Binary means that only two alternatives are available, either you earn the return on your invested amount or you either loose the invested amount. While they certainly carry a level of risk, which legitimate operators rightly state, predicting the price movements of various assets is completely different to traditional and pure-luck games such as roulette, slots, black-jack and others. Traders do not need to possess a previous financial background to enter the binary options industry, yet proper bankroll management, risk-spreading, specializing in a particular type of assets, and general interest in the markets are essential to achieve sustainable profits.
Furthermore, binary options are recognized by authorities as an investment activity and not gambling, since they are regulated by financial regulatory bodies and not gambling commissions. Operators can also increase the customers’ satisfaction and enhance their experience by offering various educational tutorials, webinars, e-books, and even expert account managers.
Binary options trading is an investment activity
At the moment, binary options are at the forefront of online trading and operators see them as a unique opportunity to engage further with existing customers and attract new ones, by giving users access to one of the most dynamic, promising and easily integratable investment instruments.
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They represent a much-needed fresh addition to an industry saturated with and tired of the traditional and well-known betting and gaming features. Binary options can wrongly be taken as a form of gambling due to their dynamic nature, but this is not exactly accurate.
A simple example to illustrate and put things in perspective: you decide to give sports betting a try, because you think it could be fun and potentially very profitable. You go on and bet on the final result of a football match, where one of the sides is a team you like. Unfortunately for you the team you placed a bet on is defeated and you lose the invested amount. It is indeed unfortunate for you, but is it really down to fortune and luck? Not really. Did you analyze your team’s performance prior to the game, are there any important players missing from the squad, how has the opponent been doing, is it a home or an away game? These are only a few factors to be considered before deciding to bet one way or another – doing a little research, collecting some statistics and leaving emotions aside would have given you valuable information what to expect at the end of the game, and in the end limiting the luck-factor.
You don’t need years of experience in sports betting to place a winning bet – you just need the right skills, which are obtained by following the sports news and discussing with fellow sports enthusiasts in this example. It’s pretty much the same with binary options trading – you shouldn’t expect to make constant profits without putting effort: following the financial news and being interested in a particular area of trading.
Binary options trading is an educated guess
Although binary options trading instrument is easy to understand and does not require deep insight of the financial market, the factors impacting the underlying asset prices and affecting the end results are multiple. The shift of prices, fluctuations and tendencies are a result of the combined mood of the millions participants in the market. Markets react to the actions of individual investors, institutional managers and financial institutions. Investors need to understand the influences on the markets so that they can anticipate the impact on their investment portfolios and implement appropriate trading strategies in order to be profitable. This is what is called trading, as opposed to gambling, an investment activity that requires knowledge, strategy, experience and curiosity.
Binary options trading is not related to pure luck, chance or intuition. It is rather an educated guess based on thorough analysis, alienating it even more from a game of chance for money. It is a huge market on its own – operators can now access an exciting, innovative, engaging and hugely-profitable industry.