Since savings accounts don’t give us the returns that we wish to get anymore, more and more people are looking at other lucrative investments. For example, some people decide to invest their money into trading methods; this is why we want to cover the question, “Are Binary Options an investment or not? Here you can find the answer!
What is an investment?
When we look at the simple definitions of an investment, this is what we come up with: “the action or process of investing money for profit or material result.” (Source: Oxford Languages) This definition shows the primary goal of an investment, which is to generate more profit. An investment can come in a lot of different forms.
Many people swear on buying property and either rent it out to develop a constant income or renovate it and sell it at a higher price. But looking at Binary Options with this definition in mind, is it a possible investment opportunity?
Are Binary Options an investment?
The short answer is: Yes! With Binary Options, you have the chance to invest a certain amount of money and make a profit. When it comes to trading, this method is one of the more lucrative ones. Depending on your broker, you can have a return between 70% and 90%. Not only that, but trading Binary Options can be done in a day.
There are so many different strategies and possibilities when it comes to this trading technique. For example, suppose you want to earn an even higher return, and you are currently “in the money” (which means all of your past investments were successful). In that case, you could use the double up strategy to double your investment and, therefore, also double your profits!
Three reasons why Binary Options are a good investment!
Are you still not sure if you want to invest in Binary Options? If so, we have three good reasons why you should give this trading method a try. This will help you to determine if you want to start trading Binary Options or not!
Compared to other trading methods, trading Binary Options is one of the most lucrative ones! This method has returns between 70% and 90% depending on your broker and this is the case for every trade! If you want to go even further than that, you can use the double up strategy.
Plus: Depending on what country you live in, Binary Options are not necessarily taxed as an income, which means you won’t have to pay high income taxes. This is, for example, the case in the UK. Even if you start Day Trading with Binary Options, it is seen as a speculative hobby. This means you not only have the chance of earning a high return but also to save a lot of money on taxes!
Good risk management
Trading Binary Options is a high return but also an increased risk method! But there are some aspects that you can follow if you want to lower the risk of losing your money. One way is to set yourself a limit. How much money are you willing to lose in a trade? This number shouldn’t be higher than 1% of your capital.
This way, even if you lose your money, you still won’t jump right into a financial crisis! Another way is to analyze the market and get to know the assets you are interested in trading. Without having a strategy and enough knowledge, it is almost impossible to be a successful long-term trader.
Luckily there are numerous brokers out there who will provide you with a lot of statistics and data to get a good feeling for your asset and the market. Some might even offer a demo account, which means you can trade Binary Options without investing any money. You train to trade! This will give you some experience and a chance to determine if trading Binary Options is the right thing for you!
Wide variety of assets
One of the perks of trading Binary Options is choosing from a wide variety of assets. For example, if you already know about Tesla stocks, you can use this knowledge for your benefit. It is also a positive aspect that you can decide on your interests.
It is easier to get invested in an asset you are fascinated by and do your research than an asset in a field that you have no ambition to know more about. You have the freedom to choose precisely what you are interested in, let it be stocks, forex (foreign exchange), or even specific assets like a Tesla stock. The more precise you can be, the better! Get to know this asset and how it behaves in the market and benefit through your knowledge when you start trading Binary Options.
Conclusion: Is trading Binary Options a lucrative investment?
Yes, it can be, but you have to keep in mind that trading Binary Options is a high-risk trading method! If you predict the correct outcome, you will earn a high return, but if not, you will lose all the money you invested. It is a possible way to make a lot of money in a short period of time, but it’s not a guarantee.
Yes, there are multiple ways to lower the risk of losing money, like analyzing the market, but we wouldn’t recommend this trading method if you are unwilling to put the effort in. But on the other hand, if you have a lot of experience and are willing to learn more about the market and certain assets, this is a great way to earn a high return. Compared to a savings account that will give you a return of about a maximum of 4%, this trading method is much more lucrative!
We hope this article helped you determine if trading Binary Options is the suitable investment method for you. As we already mentioned, we recommend going step by step and having risk management in mind. Try a demo account and see if this method is what you are looking for!