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Could Binary trading be the answer to funding your Startup ideas?


Image: Could Binary trading be the answer to funding your Startup ideas?

You may have noticed a lot of interest on the internet lately (or as a freelance investment adviser I have) about binary options. The online brokers advertise themselves as having the ability to make you quick cash and it all being very simple and easy. I will explain how binary options work and what percentage success rate you need to make money, because I am slightly worried that a lot of people looking to raise cash for your startup ideas will be tempted by risky methods like binary options.

How do Binary Options work?

Binary options are basically betting on share prices and currency comparisons. Rather than betting on Germany beating England at football you are betting that the GBP – EURO price will be higher than 1.14 at 12.00 o’clock. It is this simple.

Winnings ratio

The winnings are about 75% whilst the losses are often 100%. So put it this way if you put £10 on the Vodafone stock to go up in the next five minutes and it does you will win £17.50 but if it goes down you will end up with £0. So if you bet on two different stocks and win and loose one you will end up with £7.50, which is a £2.50 loss on your original £10. The key here then is that your win percentage has to be over 50% as this will equal my loss on any brokerage site. According to this ratio if you were to make 10 bets and get a 60% success ratio you will turn over a profit, albeit a very small one. So to be making good money you will need a 70% success ratio and I assure any amateurs that this is very difficult to get.

Is it worth it?

You have to also think about money making opportunities logically, the broker will make money when you loose it, so they need more people to loose than to win. This in itself should suggest you that only very skilled and experienced people can make money trading binary options. So this is my summary if you are prepared to spend a lot of time working with binary options and leaning everything there is to know about them and are very good at maths then yes do it. Don’t do it if your looking to make quick cash and have been convinced by an online pop up. Always be careful with any quick online methods to making money, it really isn’t easy and never has been.

Created 12/31/2013 at 01:29 PM by tomasbeaumont in Financial issues

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