A simple method of trading options is to use a security called a binary trade. Although this type of contract trades only in a very limited number of securities, it offers several advantages over traditional trading, including lower capital requirements, a shorter holding period, and a high fixed return. In today’s market, it would seem that this type of easy options trading is ideal given the current low market returns, high volatility, and scarce capital availability.
Extremely high returns attract investors
The holding period rate of return on a binary options contract is typically around 70%, depending on the broker and the security. The yield increases dramatically for longer duration contracts where a spread is involved. Surprisingly, retail brokers do not typically trade a spread on hourly or daily expiration securities, allowing for zero transaction costs. With low-cost, high-yield capabilities, even small-cap investors can find a way to make money quickly and easily using them.
Zero transaction cost and low capital requirements Open markets for retail investors
No margin or commission on a typical investment means that the money needed to earn a decent return on the investment is not heavily taxed by fees as a standard trade would be. Most retail brokers offer these easy options trading contracts in lots as small as thirty dollars and a minimum initial deposit of just one hundred dollars. Try making money with stocks or investment options online with just a hundred dollars in a regular account. Hurdle transaction costs are too high.
Short holding period brings fast results
One of the other attractive features of the binary contract is the duration of the trade, which is usually anywhere from an hour to a day or a week. An aggressive person can spin their capital four to five times in any given day with the opportunity to win money with each successive capital spin. The fixed short holding period relieves the investor of the burden of deciding when to sell, as these European-style option expiries are designed to be held to expiration, a low-maintenance way to put your money to work for a short period of time. time.
