Trading stock options is easier than you thing. Stocks trading is equivalent to buying the shares of companies and corporations in all kinds of industries. Traditionally, investors make money from stocks by selling stocks when the price rise to become higher than the strike price.
In binary options trading, you make money from stocks by predicting whether the price of the stock will be higher or lower than the current price at the expiry time. Many people are wondering whether binary options stocks trading is as profitable as stock trading.
Binary options stocks trading has lesser barrier and is much easier so it is suitable for beginner traders.
Binary Options Stocks Trading vs. Traditional Stocks Trading
Traditional stocks investors often have to worry about being able to take action at the right time to reap the profits from selling the stock. Binary options traders don’t need to worry about this because the profitability of the option depends on whether the direction you speculate will occur at the expiry time. Traditional stock trading allows you to trade on stock for only 8 – 9 hours per day but trading stocks on the binary options platform allows you to trade for up to 24 hours per day.
Trading stocks via the conventional way requires you to wait for days or months to make a few percent of profit. On the other hand, you can quickly make a profit in as fst as 60 seconds and get a high return of 80% when you trade stocks on the short term options.
This means that there is much more potential for you to make money when you trade stocks in binary options. Besides, you must have a big capital of at least ten thousand dollars to set up a margin account if you want to trade stocks. With binary options, you don’t need to come up with this much capital to enter into stock trading. The average people can trade stocks on binary options platform with an investment that is as low as $10 per trade.
The advantage of trading stocks on binary options is that there are a lot of information readily available for stock trading online compared to other types of assets. Another reason why trading stock is easier is because the stock price usually depends on the overall performance of the industry. You can earn up to 80% of profits if you trade stocks on call/put options. There are a lot of brokers that allow you to trade stocks in the weekend and this can offer a profitability of up to 500%. if you have experiences in trading stock and know how to perform analysis, you will be able to get a good returns.
Deciding on a Stocks on Binary Options
The broker usually include companies listed at various stock exchanges such as American, London and Eurostoxx stock exchange. You will find big companies in all kinds of industries in the stocks asset list such as Apple, Facebook, Qualcomm, and Vodafone. There will be information on the company background so that you know what is the company you are trading stocks on.
After you have decided which stock you want to trade, the next step is to setup a news alert like Google Alert for the particular stock. In this way, you will receive emails when there are news on the stock and pay attention to the trends. By observing the news, you will be able to learn how the price of the stock will react according to the news.
Understand the Stock Behaviors
If you want to trade stock on binary options, you must first have a basic understanding on the stock market. Successful stock traders spent a lot of time to educate themselves so that they can continually make money from stock trading. In order to predict the price movement accurately, you must understand the behavior of stocks and how the various factors affect the price movement. When there is a gloomy economy condition, people will prefer to sell their stocks and this will cause the price of the stock to drop. If a company reports a loss in revenue, the price of the company’s stock is expected to decrease.
You must know how to find the historical data of the company in order to evaluate the earnings reports of the company. You can expect a positive impact on the stock price if a company is merging with another company. A new policy that is recently established by the government can also have an impact on the stock prices. For example, if the government waive the duties on the raw materials, cmpanies in that specific industry may be able to increase their profits and subsequently this will lead to an increase in the stock prices.
Monitor the Financial News
Certain news can affect whether the price of the stock will go up or down. Knowing how to analyze the economy allows you to predict the stock price correctly and place the right trade. You should study the glossary to get familiar with the terms that binary options market analyst often use. It is only when you understand the definition of these terms that you will understand what the financial analyst is trying to say in the news. Many brokers offers updated financial news on their trading platform so that you don’t have to do research on the web yourself for the latest news.
Risk of Binary Options Stocks Trading
The risk of binary stocks trading is that you will lose your money if you make the wrong speculation. For example, if you place a trade on a stock options for $200, and your prediction is wrong, you won’t be able to get back your investment. However, there are some brokers that offers some refunds for out-of-money trades.
Trading Stock Options
In conclusion, trading stocks on binary options platform allows you to enter the stock market with a smaller capital. The strategy to successful binary stock trading is to come up with a long term strategy. It is impossible to make the correct prediction every single time but you can improve your chances of winning and earn a consistent profit with a long term strategy.