Four Big Disadvantages of Binary Options Trading

As an old saying says “When something is too good to be true, so should think more about it”. Since we’ve talked about four advantages of binary options trading in one of our previous material, we want to focus this time on four disadvantages of trading binary options so you won’t be aware of the risks involved in this area.

As a brief risk remainder, so should be aware that speculative investments carry risk and you can lose money, so before jumping into it you should understand both the positive aspects and the negative ones and only then see if it is appropriate to invest your money.

Disadvantages of binary options

Source: http://www.forexnewsnow.com

The main pitfalls of binary options trading

  1. Lack of regulation – since binary options are relatively new instruments, there is no significant regulation around it and because of that there are few agencies who can monitor this sector.
  2. Poor reward to risk ration – even though you manage to find good trading opportunities, with binary options you will make around 90% profit on a winner and lose 100% of your risk if the market will move against the direction you thought it will go. Having higher than 50% accuracy is a must if you want to generate long-term profits with binary options trading.
  3. Few order types – call/put options are, in general the only options you have available, since you just have to speculate the direction of the price over a given period of time. No limit of stop order, in comparison with the forex trading.
  4. No stop loss order – even though you see that the market is going against of your direction, you are not able to close your position, before the option expires. This is one huge disadvantage as being able to close it ahead of the expiration can help you reduce a huge part of the losses. Lately, some of the brokers begun to introduce that option as well.

This are one the most important negative aspects you should consider before starting to invest in binary options. Hope the material helped you understand some key concepts about this subject.

17 Responses to “Four Big Disadvantages of Binary Options Trading”

  1. Great blog! Is your theme custom made or did you download it from somewhere?
    A design like yours with a few simple tweeks would really
    make my blog shine. Please let me know where
    you got your theme. With thanks

  2. Awesome blog! Do you have any suggestions for aspiring
    writers? I’m planning to start my own blog soon but I’m a little lost on everything.
    Would you suggest starting with a free platform like WordPress or go
    for a paid option? There are so many choices out there that I’m completely confused ..
    Any ideas? Cheers!

  3. I know this if off topic but I’m looking into starting my own weblog and
    was wondering what all is needed to get set
    up? I’m assuming having a blog like yours would cost a pretty penny?
    I’m not very web smart so I’m not 100% certain. Any tips or advice would be greatly
    appreciated. Many thanks

  4. Link exchange is nothing else except it is simply placing the
    other person’s webpage link on your page at appropriate place and other person will also
    do similar in support of you.

  5. Fantastic items from you, man. I’ve understand your stuff
    previous to and you’re simply extremely great. I really like what you’ve acquired right here,
    really like what you’re saying and the best way by which you are saying it.

    You make it entertaining and you continue to take care of to keep it
    wise. I can’t wait to read much more from you. This is actually a tremendous web site.

  6. I just like the valuable info you provide for your articles.
    I will bookmark your blog and check once
    more here regularly. I’m fairly sure I’ll be informed lots of
    new stuff right here! Best of luck for the following!

  7. Do you mind if I quote a couple of your articles as long as I provide credit
    and sources back to your weblog? My website is in the exact same area of
    interest as yours and my users would definitely benefit from some of the information you present here.
    Please let me know if this okay with you. Thank
    you!

  8. I like the valuable information you provide in your articles.

    I will bookmark your blog and check again here frequently.
    I am quite sure I’ll learn many new stuff right here!

    Best of luck for the next!

Leave a Comment

Binary Options Zone Copyright © 2019