Today I am reviewing yet another different type of investment option called Binary Options. I’m going to be honest, I have never traded in binary options before, but it is something that I have considered.
What is a Binary Option?
A binary option is a type of option where you either get paid a fixed amount or nothing. Due to this type of payoff binary options are often compared with gambling where you bet on an outcome and if you win you make a set amount of money, whereas if you lose you lose your initial outlay. The main difference between binary options and gambling is that binary options are based on financial instruments like currencies or stock prices where as gambling is primary based on sporting events.
If you want to learn more about binary options then investopedia has a great write up here.
So now we know what binary options are, let’s take a look at AnyOption.com who is a binary option trading company. AnyOption is one of the oldest and largest binary options trading companies. Operating since 2008, AnyOption is based out of Cyprus and provides 24/7 support and is available in several languages. AnyOption offers options on hundreds of underlying assets including stocks, commodities, indices and currencies.
AnyOptions offers you a 65%-71% payout when the option expires in the money. That means that if you spend $100 on a particular option you can expect a profit of between $64 to $71 depending on the option selected.
- Provides a 15% return if the option expires out of the money. So worst case, you can’t lose all your money in one go.
- Provides many different types of markets to trade meaning you should be able to find something that interests you.
- AnyOptions has a Live page which enables you to see what other users are trading and what is trending.
- You can lock in profit prior to the expiry of the option using the Take Profit feature. This is good if you are in the money and want to guarantee a profit.
- AnyOptions is one of the few regulated binary options companies.
- Options trading is risky and you can lose money much faster than in other investment types. This is true for all binary options companies and not just AnyOptions.
Overall I can see some real advantages to using binary options as an investment type, however I think you need to have a high risk profile and I wouldn’t recommend investing more than a few percent of your total portfolio in this type of investment class. If you do not know much about investing or if you are prone to things like gambling addiction, then I would probably steer clear of this if I were you.
When it comes to brokers, I can’t see any reason not to go with AnyOption. They have great reviews around the internet and they provide some excellent features to help you on your way to making money.