Gold Binary Options
How gold is traded with binary options
Many people are trading using binary options gold these days. You may be wondering what gold binary options are, and it’s a fair question. In this article, we lay out the important fundamental aspects of using binary options to trade the world’s most sought-after precious metal.
What is Gold?
Gold is a commodity. Gold is a precious metal. Gold is used in everything from jewellery to dentistry to high-tech, and even luxury gourmet cuisine. Gold has historically been used as a form of currency. It was only several decades ago that the United States officially moved off of the gold standard. And despite this change, gold has been a standard of trading across markets, over millennia, and throughout history.
What are Binary Options?
Binary options assets are scientifically formulated by two Nobel prize winning economists several decades ago, and it is a tried and tested form of investment which was, for a while, only reserved for the upper echelons of big trading houses. Using mathematical formulas, binary options basically let you invest in the amount of difference between trades made at that time, speculating on the rise, fall, or stability of an option on the trading floor.
What are gold binary options?
Gold binary options are not like regular gold options in the sense that you are not required to buy a direct piece of the gold which is being offered. Instead, gold binary options are somewhat similar to the idea of trading derivative assets, based on many factors.
Here at Optionsclick, there are many ways to trade gold binary options.
- High/Low lets you trade on whether or not you think the gold options will go high or low.
- Range lets you trade on whether or not you think the ever-popular precious metal will stay within a certain price range.
- Touch lets you trade on whether or not you think an option will touch a certain price during an allotted amount of time.
- 60 seconds allows an investment to only last one minute, and the investment is based on whether or not the investor thinks that the trading will reach a certain target price.
Advantages & Disadvantages of gold options
The advantages of trading gold with binary options are actually quite significant, hence the incredible popularity which they have enjoyed in the last few years. One of these advantages is that the investor does not need to invest a large amount of money for each trade. One downside of trading the old fashioned way is that each stock generally carries with it a very high price. That is one of the big reasons why trading large quantities of stock was previously reserved for people with a significant amount of capital with which to begin making an even bigger financial fortune. Because of this, the average person in the street did not have enough money to start investing until they usually came into some money (be it via an inheritance or some other fiscal windfall).
Long Term vs. Short Term Investing
Then, too, gold and other commodities are traditionally held on for a long period of time, meaning that somebody who invests in gold won’t usually see a return for quite a long while. And there is also the fact that long term investing is typically seen as a more common investment approach for large amounts of assets rather than short term investing, which can easily increase the pace and volume of trading.
Macro vs. Micro trading
This is where binary options can be so useful. First of all, as actual gold bullion or ingots are not required to be purchased by the buyer, an investor can simply invest a few dollars, or even pennies, per investment if they so desire. Naturally, this creates copious amounts of opportunities for regular people who don’t have fortunes to invest in commodities to begin with. It has, in a sense, opened up the investing playing field to virtually anyone and everyone.
Trading gold commodities with binary options also enables people to test out their ideas with very little risk involved. And even better yet, this form of exchange enables them to diversify their investments with very little capital. Typically, investors rely on diversified investments so as not to lose a lot of money all at once by putting all of their eggs in one basket, so to speak. While investing only a few dollars per investment, a person can invest in binary options gold and avoid losing hundreds of dollars per trade, and take that other investment money and put it in other trading options. This minimizes their risks if their investment was a poor choice.
Another advantage is that since binary options are short investments, the online trader does not have to wait for days, weeks, months, or even years before seeing a return on their investment (ROI). And if they invested well enough and generated a decent ROI, they may take part of those profitable earnings and put that money back to work for them in more investments, slowly building up a nest egg or even a tidy fortune.
Yet another reason that binary options is a good choice is because the returns on each investment in, say, gold binary options, is phenomenally huge. The return rates dwarf regular investing by scores. Typically, with regular stock investment, one sees only a small percentage of increase of funds, but with binary options the rate of return can be as high as 89%, and sometimes even higher.
Freedom to Choose
One last big advantage of exchanging gold with binary options trading allows you to generate capital in more than just investing on when the commodity goes up in market price. In regular commodities investing, you will only see a positive ROI if and when the commodity keeps going up in value. When the commodity goes down in price, you’re losing on your investment. However, with gold binary options, you choose to predict on a wide range of options. Those include: Whether the price of gold goes up, down, stays the same, touches a price, doesn’t touch a price, etc…. So if you are a traditional commodities investor, and you see that gold has been going down for quite a while, you may choose not to place your investment in gold unless you think it’s going to go back up very soon – and that can mean days, or even much longer. Meanwhile, the binary options investor can leverage some capital on the desired commodity when it its price is moving in a lower direction, and predict that it will continue to go low. If that prediction is true, then he or she will earn just as much of an ROI as if the stock was moving higher – there is absolutely no difference in the return on the type of prediction.
Thus, binary options give you not only a wider range of choice for investment, but also limit your losses and make it easier for anyone to invest in the commodity of gold, no matter what their economic background. Essentially, it has become a great liberator of the commodities market and an equalizer in the investment field. No wonder, then, that it took so long for binary options to be made available to the public. Since then, millions of people have taken it upon themselves to use it and start investing in their futures.