When it comes to trading, one of the major questions that will come to every trader’s mind is the difference between Binary Options vs. Options. Well, in this article, you will get to know everything about these trading types. Besides, the article will also help you to know which trading type to choose to enjoy a better trading experience. So, let’s get started with this.
For investment, you can go for different types of hype products, for example, spread betting, bitcoins, and more. However, the most hyped investment option that you will find now is Binary Options.
This type of trading has become so popular that, when the traders search for options trading, they will see SERPs with Binary Options trading results. It is very rare to see real options trading. Why is this form for trading so popular? Can you make millions from Binary Options trading?
Well, it depends on the trading strategy that you deploy. Besides, you also need to choose the right form of trading to earn maximum profit, i.e., Binary Options or Real Options trading. Let’s discuss these two trading types in detail.
Binary Options vs. Options- Trading expiry time
One of the major differences between Real Options and Binary Options trading is the expiration duration. In Binary Options, the traders will only get 60 seconds, but in Real Options, you will get an expiration period that can go for months or years.
As a result, you will get sufficient time to analyze the market and choose a profitable stock for the investment. Besides, you will also get time to predict the price of the asset or commodity.
But when you have a very short expiration, you can only trade based on the current market price that can go up and down immediately. This is something that professional traders can’t also forecast.
This is a major difference between Binary Options vs. Options. If you want to enjoy a long-term investment, then choosing Real Options will be a great thing for you.
Binary Options vs. Real Options trading- Profit limit
In the case of Binary Options trading, the payout is very limited, and the brokers decide this. But in the case of Real Options, the payout is unlimited. For example, while doing Binary Options trading, you may get a fixed payout, around 70 to 80 percent on your investment.
Even if the price of the stock moves up, your payout will be 70 to 80 percent. But Real Options gives you a chance to win more. With the movement of price, you will keep getting profits, and you can earn more than 100 percent of your total investment.
Well, to earn more profits with Binary Options trading, you may prefer to invest more, but this will also increase your risk because the price changes rapidly and can go down sharply, causing a huge loss.
Real Options vs. Binary Options trading- The loss factors
Now, this is something that you should always keep in mind while talking about Binary Options vs. Options. According to experts, people doing Binary Options trading can get back 15 percent of their total money when they face a loss.
But in Real Options, you can lose 100 percent of your investment if the stock value goes down. So, this is something that can make Binary Options a good trading form. But at the same time, you shouldn’t forget the profit limit.
Even though you are losing all your money, Real Options also offers you the opportunity to gain more than that. Besides, you can wait and let the price of the stock rise again until you make some profits. So, this again makes Real Options a better form of trading.
Real Option vs. Binary Options- The trading factors
Well, you should remember that the trading word in Binary Options is not an actual trading process. In general, trading means one can buy and sell a stock or things. But in Binary Options, you can only buy and cannot sell that to other traders.
You will have to hold the stock until its final outcome, and there is no way you can sell that. That means you will not get the Stop Loss option while doing Binary Options trading.
But in the case of Real Trading, you can sell the stocks to other traders any time before their expiration. If you think the price will go down, then you can just sell it to prevent any loss. This major difference between Binary Options vs. Options makes the latter a perfect option.
Binary Options trading vs. Options trading- Instrument types
Another major differential factor between Binary Options vs. Options is that the former type of trading does not even exist. That means Binary Options is not a real financial instrument, and you will not find this with regulated public exchanges.
This form of trading is only carried out using various computer programs, and they work just like online casinos. And the brokers can use those programs to make the traders lose all their money. That’s why some Binary Options traders are now facing scams.
Speaking about Real Options trading, you can find the assets or contracts listed on public stock exchanges, and when you buy them, you will get them as the equity assets in your trading account.
As discussed here, you will only buy the real assets, but when you buy the binary options, you are only buying an expense using your money.
Binary Options vs. Real Options trading- Brokers and traders
While doing Binary Options trading, you are only trading with the brokers, and they can be fake or illegit. However, in Real Options, you will be trading against and with real market makers or traders.
This, in turn, increase your chances to win more, and there will be no scams. It is much better than doing electronic betting, i.e., Binary Options trading.
Binary Options vs. Real Options- Underlying assets
In Real Options trading, you can trade real options contracts or underlying assets. For example, when you choose the AAPL call options, you can buy real stocks of Apple.
But in the case of Binary Options, you can buy or sell the stocks. You can only deal with Digital Options, and some experts consider this as an online casino.
Real Options vs. Binary Options trading- Regulations
If you research properly, you will find that most of the Binary Options brokers are not regulated. However, to offer the Real Options trading facility, the brokers should be regulated and registered.
Only the brokers registered under the SEC- Security and Exchange Commission are allowed to offer such services. Besides, they also need to have an investor protection scheme, For example, FINRA- Financial Industry Regulatory Authority scheme.
While trading or investing, you should always choose a regulated broker to prevent investment scams.
Binary Options Vs. Real Options- Money deposit
Depositing money for Real Options trading can be a little difficult for the traders compared to depositing money to a binary options trading account. But why?
Well, Real Options trading is more legit than Binary Options, and to begin trading, you will have to open a bank account first. So, you can’t transfer money to the trading account using your credit card, which is possible in Binary Options trading.
As per the trading rules and regulations, real financial institutions can’t accept money from credit cards.
Binary Options vs. Options- The money withdraw factors
In the case of real options trading, the traders can easily transfer their money from the trading account to their bank account. But in the case of Binary Options trading, you may find this process a little complex and time taking.
In real options, you may find it difficult to deposit the money, but withdrawing it will take a few minutes.
If you are doing Binary Options trading and want to withdraw your money, you will instantly get a phone call from the brokers promising you to offer different benefits if you don’t withdraw your money. However, sometimes, this can be a scam. So, be careful about this.
From the above discussion on Binary Options vs. Options trading, it can be said that both are two different things. Different studies have proved that most of the Binary Options online brokers are not legit, but the Real Options brokers are 100 percent legit.
Some people have not even heard about the Real Binary Options as they are not advertised at a great rate.
When you go for Real Options trading, you will get a real chance to make real money, but in the case of Binary Options, the chances of making a profit are 50-50.
In the trading market, you will find investors with two different thoughts when it comes to trading Binary Options. Speaking about the first group, they consider the binaries a great way to improve their standard, and they prefer to stay away from the Real Options.
The second group always considers this as a form of gambling, and they don’t trade; they just try out their luck.
When you trade properly, you can earn a decent profit from these types of trading. In fact, both the Real Options and Binary Options are considered as high return financial instruments. Just understand that market and trade properly. Happy Trading!