Binary otions vs options, what is the difference between the two.
Binary options are based on rules, often made up by a broker that have lower probability of working than not. They are often not regulated and have rules about time limits and specific price requirements before they will ‘win’. Binary options are widely considered as a form of gambling or betting.
Options on the other hand, offer the option to enter and exit positions freely based on price now and perceived future pricing. A trader can make a decision based on price of the option, and the likely future value over a time period in days, weeks or months.
What is the difference between binary options and options?
Binary options often offer a much shorter time frame on the price movement, and a specific set of rules which will either work or not. The ability to exit sooner or let a trade run is gone when it comes to binary options. This is why it is considered more of a bet compared to trading CFD’s or options. There is either a win or a lose outcome, rather than a reward or loss based on general price movement of the asset. Since binary options are far more specific it’s very difficult to make it work consistently when compared to regular trading using CFDs or options.