Digital options often known as WikiTrader Software binary options or fixed return options are in many ways similar to traditional options. However, there are some significant differences between the two. They are simple trading instruments which do not require exceptional knowledge or experience in trading or financial markets.
Even though superior knowledge of markets and trading usually leads to superior results, it is not a prerequisite to being a successful digital options trader. In this article, we are going to touch on the advantages and disadvantages of trading digital or binary options.
Just like traditional options, digital options are also available on a large number of underlying assets. Stocks, indices, commodities, and currencies are the most popular assets in the binary options trades. However, unlike traditional options, these exotic options pay out a fixed, known return.
It also does not depend on how far in the money your option is. If the underlying asset you traded a digital call option on is higher than the strike price by as much as one pip/tick, then you are given the same high returns as if it finished in the money by 100 points.
Magnitude is irrelevant with digital options. This is one of the most appealing features of trading in digital options for investors.
Digital options trading highlights
-Market neutral instruments
-Quick and easy to trade
-Strictly limited risk
-Small initial investment required
-Have no commissions, fees or other hidden costs
-High, fixed potential returns knows beforehand
-Requires only a WikiTrader Software small move in the underlying asset
-Can be traded at any time of day or night
-Trade on stocks, indices, currencies, commodities and more
Some of the disadvantages of WikiTrader Software digital options trading
-Potential returns on winning trades is and will always be less than potential losses on losing trades. You will roughly need a 55% win rate for profitability.
-Most of the digital/binary options brokers offer trades which amount to little more than a roulette spin. One of them is the 60-second options. Even though we are fans or binaries, we advise beginners to avoid investing in these types of trading.
-No claim to an underlying asset. This can be a disadvantage to some traders but may not be for most of the traders for sure research on www.pushmoneyapps.com/wikitrader-software-a-scam.
-Some regulatory conflicts for US based traders
Digital options trading can be a good choice for some investors or speculators. However, just like anything in life, it has its own set of strengths and drawbacks and is not always right for everyone.
WikiTrader Software Binary Options review which was stated back in March 2010 is committed to educating a wider audience about the exiting and the relatively little-known world of binary options trading hence helping you increase your profits.