Forex vs Binary Options

bigstock-Touch-Screen-financial-symbolsWhen considering daily turnover, the forex market is by far the largest market in the world, eclipsing all the stock markets of the world combined.  Through the forex market, financial institutions, corporations, and even retail investors are able to convert currencies and make profits from currency rate changes.  The forex market has been growing by leaps and bounds over the past decade as more individuals get involved in the highly profitable activity of forex trading.

Binary options, on the other hand, have a quite small market, but it too is growing by leaps and bounds.  Having been established for retail traders in 2008, the binary options marketplace has seen exponential growth that is expected to continue for some time to come.  Binary options enjoy their popularity thanks to the ease of trading and large profits to be had.

Binary Options vs Forex

Forex and binary options do share some similarities, but they also have many differences.  This makes them difficult to compare, but one of the draws of binary options is that they are so simple to trade when compared with forex.  There is no need for new traders to learn the complex language required of forex traders, nor will they need to concern themselves with spreads, slippage and requites.

Binary options also offer very high returns in a short period of time when compared with forex.  While it is true that a highly leveraged forex trader can make large profits in a matter of days or weeks, binary options profits can be calculated in a matter of seconds.  Some binary options have yields as high as 85% in as short as 30 seconds.  No matter how much leverage is used, a forex trader will never see those types of returns so quickly.

Investment risk is another difference seen between binary options and forex.  With binaries, there is a fixed and known risk since the return and potential loss are both fully known when the trader purchases the option.  With forex the risk is unlimited and it is possible for a forex position to completely wipe out a trader’s account.  Just one trade gone wrong in forex has the possibility for millions of dollars in losses.

Forex markets trade 5 ½ days, 24 hours a day, but binary options trade only when markets are open.  This means there may be limited opportunities to trade at some times during the week.

One of the greatest differences is the fact that binary options give a trader access to a huge array of assets.  While forex traders are limited to trading just currencies, a binary option trader can also speculate in commodities, equity indices, and even individual stocks.  Plus, they still have access to a large number of currency pairs.

Even with all their differences, there are some similarities to be found with forex and binary options.  Both are traded through online accounts, and both are available to traders across the globe.  They also remain similar in that both forex and binary option accounts can be opened with as little as $100, making them very accessible to the individual trader.

With all the above differences, still forex and binary options have some similarities.  Both are available to traders all over the world, and both are traded online.  And both require just a small amount of capital to get started.

Start trading binaries today.

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