What risks are involved with binary options?

While there are ways the risk for all financial assets to be reduced, it is a fact that there is always a risk – and binary options are no exception here. First of all we want to but once explain what in the world of finance is defined as a risk: the fluctuation by the expected value. Suppose that you invest in a share that normally 10% yield per year yields. It was in a year only 9%, while in the other 11% generate is the risk of very manageable. But it is in a year 0% and in the other 20%, then the fluctuations is already very high. We speak then of a higher risk. And if I can say now that you in the case of binary options in either 85% or – 100% return, then hardly mentioned that the risk is very high.

Types of risks

although it is of course no way gives the fundamental risk from the binary options, it is especially important to be aware of these risks. You must also keep in mind what it costs to minimize the risk. Suppose you buy a call and a put option on the same base value at the same conditions. In this case it is always an option in the money and land your payouts are 100% secure. The return is but everything else as well, because in the long term you will lose money. This is roughly the same as when you buy a stock and a share short selling. If there are two transactions fees and you deserve nothing more – not a good idea. Banc de Binary Review.

Let us now take a look at the individual risks on the market for binary options:

Market risk

as well as for all other investments there is also in the case of binary options market risk and that means that the courses can move in all directions without this would anticipate. While there are options closer to assess the price developments, but the are no guarantees. The course can be even with a precise forecasts yet in a totally unexpected direction.

Limited profit

a further risk the trade rbeachten need is that your payments are fixed. In the case of binary options are both the losses as well as the profits are fixed. There is no potential for above for the favorable developments. Is positive but that also only slightly positive developments high yields and that the losses are predictable.

Very precise determination of profits

in the case of binary options is it really to smallest movements, since here very accurately the courses to be determined. Most brokers confidence here to 0.0001 points and this means that the difference between 0.0001 85% yield or total loss can mean.

Limited intervention options

once you have purchased a binary option, there is no going back. You will then need to wait until the expiry time has come. There are broker who offer an option exercise in advance, but that you should not get involved in the rule.

The risks outweigh the benefits?

While it as you can see a number of risks with binary options, there are also a large number of advantages. One of the biggest advantages is that their risks are known as soon as you make a purchase option. You know exactly what to expect and what payments you have to expect. Therefore you should also adjust your investment.

The best way to deal with the trade of binary options is to become more familiar with a free demo account to do so. So you can experience, without risking their own money. For example option888.