Binary options are fairly new tool for investors here in the U.S. They were approved for listing by the SEC only in May of 2008. What many are finding out is that binary options are a simple investment that make it easier for the average person to get in on all the profits that the big investors are seeing. In general, investing is somewhat complex. Whether you are in the stock market, forex, commodities, or options you generally need a fair amount of capital, time and know how to realize a profit. If not, you will be paying a huge commission to a broker, and yet have less control over your money. Those of us looking for a simple investment, that we can attempt ourselves, now have binary options. Similar to vanilla stock options in some ways, binary options offer a simpler approach. Lets see what makes them so simple.
When I say knowledge is what makes binary options a simple investment I mean the knowledge you have going into the investment. Before you put any money at risk you have the knowledge of the exact amount you stand to gain, or lose. This makes it easier to make decisions because there is much less that is unknown.
2. Limited Assets
Compared to the vast number of assets available on the NYSE binary options brokers offer very, very few. To me, that is a good thing. One of the problems for the casual investor is trying to determine what company, or currency is going to benefit them the most. Often times people spend so much time looking at different assets that they never actually get to the point of making a trade. With binary options the assets are limited to a select number of stocks, currency pairs, commodities, and indices. This just makes it that much simpler for those of us looking for a simple investment.
3. Limited Research
Every investment requires the proper research. That is inescapable unless you want to lose money on all of your investments. The difference with binary options is that you need a little less information to make a safe investment. Under normal circumstances you have to know (to the best of your ability) if an asset will go up, or down. How much it has the potential to rise. How it will perform over the long term, and what you stand to gain. With these options you only need the simple knowledge of what direction an asset will go in the very short term. That’s it.