When most people think of financial investment they think of investment in ‘stocks’ or ‘shares’. This is one of the oldest investment methods and involves holding a ‘share’ of a company’s assets.
The basic idea is that you hold a portion of the overall net worth of the company in the hope that it will appreciate over time. As the size and the value of the company increases, so too should the value of your holding.
Finding the right company to back can require a lot of work and investigation on the part of the investor. This may involve looking through several company accounts and balance sheets before you find a company worthy of investment. Furthermore, even if you pick the next Google, you are going to need a substantial amount of capital to see a good return on your investment.
When you factor in the dealing costs and the potentially long time horizon before you are likely to see your profits, then this form of investment doesn’t seem very attractive.
Binary stock options offer a simpler and much faster way to profit from changes in the valuation of a stock. They also eliminate much of the hard work in finding a good stock to invest in. To start with, you don’t have to worry about the long term fundamental prospects of the company. This means no going through analysts reports or having to delve into the darker regions of company accounts.
Perhaps more significantly you don’t have to wait a long time to see your returns. As will all contracts you can simply dip into the market and profit from short term moves. Placing hourly, end of day and weekly contracts is possible on . Importantly, this means you won’t have to tie up your money for long periods of time. Furthermore you are in line to earn a leveraged return on your investment and can control your risk.
Another benefit of trading stock options through your binary options broker is that is gives you low cost access to global stocks. Normally international dealing through a traditional stockbroker can attract hefty charges. This is not the case when trading through a binary broker. As with all options contracts that are placed, you trade commission and fee free.
The range of stocks offered varies hugely between the different binary options brokers. If you are planning on focusing on trading stocks as a key part of your strategy, then you’ll want to check the asset index of your broker to see what contracts are on offer before opening your account.
Brokers tend to focus on the largest global stocks – Google, Amazon, Apple, Coca Cola and Nike are just a few examples. US stocks tend to be the most widely offered, although you will also find a good selection of major European stock options with many brokers (HSBC, BP, Gazprom, BMW etc) as well as some key stocks from the other major markets (Mitsubishi, TATA, PetroChina etc). Brokers are increasingly adding new stock options contracts to their line ups so the chances are that if the stock you want to trade isn’t available yet, it soon will be.