Just imagine you come to see your friends and say
«Champagne for everyone! I’ve made a 300% profit on shares of France Telecom, Google, Deutsche Bank, and Vodafone!»
Binary Options on Stock
To understand the difference between stock and binary options on stock trading, you need to know what a stock is.
A stock is a valuable security entitling its holder to a part of a company’s assets and revenue.
If you buy stocks, you need to invest a substantial amount of money as stocks of the large companies cost a lot. Besides, there is a requirement for a minimum quantity of stocks that an investor must buy. Therefore, you can’t buy just one stock; you can buy, say, minimum 100 stocks. That means that to buy stocks of the world’s top corporations, you need to spend thousands of dollars.
After purchase, you can wait for months or even years before the stocks rise enough to yield a profit.
An average stock yield traded on the stock exchange is 10% to 20% a year.
What are Binary Options on Stock?
Binary options on stock are a kind of a leverage enabling an investor to make a profit on stock, whereas he doesn’t actually buy it. A binary options buyer can make money on both rise and fall of the price. The price is to rise or fall during a certain period which is a binary option period.
Advantages are Evident
You can buy an option for just $25. To buy stock, you need at least $10,000.You can buy a binary option on stock for 15 minutes, an hour, day, week, and month. You buy stock for a long-term period, a half of year to 10 years to make a targeted profit.A binary option on stock can yield a 70% profit in just 15 minutes. You can buy up to 10 binary options on various companies stock and make a 700% return a day. If you buy stock, you get only 20% per annum.Binary options on stock are available 24 hours. To buy stock is not so easy.
Let’s us assume that you want to buy Apple stock available at uTrader because a new device or phone or laptop will be released in a week. You are completely sure that the price will climb up, at least, the first days of selling. If you buy a binary option on Apple stock for $1,000 for a day, and the price rises even by 0.0001 by the end ofthe day, you will make a 70% profit, that is, $700! You can make that amount even faster. You can buy the stock an hour before the shop is open the day when a new product is released. How much the price will rise doesn’t matter, you will get a return if it climbs up by 0.001! Your $1,000 can return $700 even faster if you buy a binary option for a shorter period.
“I never buy anything unless I can fill out on a piece of paper my reasons. I may be wrong, but I would know the answer to that. “I’m paying $32 billion today for the Coca Cola Company because…” If you can’t answer that question, you shouldn’t buy it. If you can answer that question, and you do it a few times, you’ll make a lot of money.”
The big advantage of the binary options on stock as opposed to stock is that you know how much you will make or lose from the start. Besides, you can make money both on a rise and fall. Indeed, the binary options on stock are really great.
E.g.: You learnt about flood in Japan, in the zone where Samsung plant is based. You know that if the plant is flooded, the company will sustain losses. In that case, the company’s shareholders will lose as the price of the shares will decrease. But you won’t lose if youbuy a binary option. What you need to do is just to click on the PUT button, wait until the stock will fall, and make a 70% to 80% profit. And what is more important, you can do it within an hour or even 15 minutes.
Thus, if you trade binary options, your profit doesn’t depend on the company performance, but on the direction the price of the stock will take.
How to Make a Profit on Binary Options on Stock
Binary options signals are the key point. You have to look for signals, prerequisites for the price changes, that is, a rise or fall. A new product, new loan, new market, positive quarterly report, resounding presentation, successful announcement or release to the market is a sign that the price of the company stock will increase.
Natural disasters, release of a cheaper or better product by a competitor, negative revenue report, contingencies, and bans indicate that the price of the stock will drop.
How I Make a Profit on Stock
Generally, I follow the trend. For instance, I check the stock of BBVA and make a decision to buy a binary option from AnyOption as I expect the price to increase:
Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) is a multinational Spanish banking group. This is the second largest Spanish bank and seventh financial institution of the EU. It has a strong position in banking business. The stock of the bank is traded on the Madrid Stock Exchange (MSE).
I select the amount of investment, that is, $140 and click on the CALL button (the price will rise):
The chart shows that it’s 12:06 p.m., and the option expires at 12:30 p.m. If the BBVA stock rises by just 0.001 during 24 minutes, I will make a 80% profit.
Time goes fast, and here’s the result of the trade:
You can combine technical and fundamental analysis. If you trade binary options on stock, don’t buy too many options chasing a highprofit. I advise you to buy 3 to 5 options on stock if you are confident in the result. Don’t buy, say, tens of options if you just rely on luck.
Quite a few investors change stock to binary options trading as they are affordable and, what is more important, they yield a higher profit.