Advantages of trading Binary Options over Traditional Options

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• Binary Options are generally simpler to trade because they require only a sense of direction of the price movement of the underlying asset, whereas traditional options require a sense of direction as well as the magnitude of the price movement. No actual assets are ever bought or sold, so the selling or shares and stop losses are not part of the process.
• Binary Options always have a controlled risk to reward ratio, meaning the risk and reward are pre-determined at the time the contract is acquired. Traditional options have no defined boundaries of risk and reward and therefore the gains and losses can be limitless.
• Binary Options provide nearly all the trading and hedging strategies that are possible while trading traditional options. Both fundamental and technical analysis strategies can be used to increase the accuracy of price movement prediction.
• Unlike a traditional option, the payout amount is not proportional to the amount by which the option ends up in-the-money. As long as a Binary Option settles in-the-money by even one tick, the winner receives the entire fixed payoff amount.
• Binary Options offer contracts with short-term durations. In some markets, Binary Options contracts close multiple times throughout the trading day, while others may last as long as a year. Some brokers provide contract times of as short as thirty seconds. This provides the trader with several investment opportunities and flexibility as markets change over time.

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