Binary Options Versus Spread Betting explained
Let’s start with the benefits for Binary Options over Spread betting as they will explain already some crucial points of difference between the two.
- Only your initial deposit is at risk
When spread betting, it can happen that you lose more than your initial deposit. This is why it is crucial to have proper money management and set a stop loss which saves your account when the market moves against you aggressively. The control in Binary options remains with the Trader as they decide upfront what maximum amount they put on the line and they know exactly what the profit or loss will be.
- Binary options has no spreads
When you as a trade placing a spread bet you have to pay the broker the spread, depending on how much you trade and which assets this can be a very costly issue.
- More ways to profit
Spread betting, has just one trading format in going long/short via making pips. Binary options and its brokers offer many different kinds of trading allowing the traders to find their preferred format of trading. This by the way is also one way how brokers differ as some have special trading formats that allow you to even more minimalize your risk.
Binary Options is a good start for people that want to start trading as the risks as lower while you still as a trader are able to make good profits, same counts from the more seasoned traders that look to take advantage of a trading opportunity.
In short it is simple an easier and safer way to trade
Other important advantages of trading binary options :
- Profit when markets are rising or falling.
- Trades can be placed with as little as $1 / €1 / £1 up to a maximum of $1,000 / €1,000 / £1,000.
- There are no fees, spreads or commissions.
- Placing a trade takes seconds.
- Flexibility, once the trade is made you are done so no need to sit for hours at end in front of the screen. You know when the time expires for your trade