As with any kind of investment, knowing what kind of return you can expect will help you determine if binary options are right for you. There are different kinds of investments and each one is capable of different kinds of returns depending on the situation. In the case of binary options, consider the following scenarios:
- If you invest $100 with 0% rebate. With a perception of winning that is based on winning probabilities of 50% to 100%, you can expect returns of anything between -20% and 100% of the value your investment. This means that your $100 could give you a return of -$200 to $1,000.
- If you invest $100 with 5% rebate. At probabilities of winning set at 50% to 100%, expected returns fall within the range of -17.5% to 100%. This translates to -$1,750 to $10,000 for your $100 investment.
- If you invest $100 with 10% rebate. Still with winning probabilities between 50% and 100%, a $100 investment gives you a range of possible returns at -15% to 100%. With variations in platform accounted for, your $100 can bring you between -$1,500 and $10,000 in returns.
- If you invest $100 with 15% rebate. You can expect returns to be between -12.5% and 100% of your investment. If you have a probability of winning between 50% and 100%, an investment of $100 can give you returns as low as -$1,250 and as high as $10,000.
Of course, the more you invest, the higher the returns you can expect when a trade goes the way you want. Just use the scenarios above to give you an idea as to how much you can expect to make with binary options. The same is true though when it comes to losses. The higher your investment, the more you lose when you luck out. This is why it is important to know when to rein it in when it comes to trading. While you can never get rid of the risks, it is at least possible to minimize them as much as possible. But you can only protect yourself when you know when to draw the line. It’s tempting to keep trading when the market is in your favor but keep in mind that markets can be very volatile as well. If you don’t have enough experience, you can fall prey to fluctuations in the market without knowing it and before long you would’ve lost a lot of your investments.
Trading is very much like gambling, yes, but only in the sense that you can never really say what will happen until it does. Even with the best predictions, nothing is 100% accurate. Trading is very organized though and follows systems, trends, and platforms that can guide you towards investing in the right trades. You don’t have to go into trading blind that’s why it attracts a lot of interest. Even when you’re just starting out, simply arming yourself with information aids in increasing your chances of success so you can make money in trading like a lot of people. If you’re not confident that you can successfully pull off a trade on your own, don’t fret. You are more than free to hire a broker to trade in your place.