CFD TRADING VS. BINARY OPTIONS TRADING | INTRODUCTION
With the variety of online trading instruments out there which on the surface appear quite similar, jet offer quite different proportions for the trader, choosing the one that suits you best may prove to be exhausting task. In order to ease that task for you cfdtradingreview.com has provided you with the direct comparison between CFD Trading and Binary Options Trading.
CFD TRADING VS. BINARY OPTIONS TRADING | SIMILARITIES
Both CFD Trading and Binary Options Trading give you the opportunity to benefit from rising as well as falling markets and access a wide range of different markets. By mirroring the asset or index both are derivate products and allow you to trade without actually owning the asset, so they are relieved of taxes and stamp duty. As they include small start up capital, you don’t have to have a ton of money to trade them so both are accessible to larger group of people. Both CFD Brokers and Binary Options Brokers provide you with most sophisticated risk management tools therefore giving you the ability to always control your risk.
CFD TRADING VS. BINARY OPTIONS TRADING | BINARY OPTIONS TRADING
With Binary Options Trading your expiry date is predetermined. Being so, Binary Options always have fixed amount of risk per contract meaning that you always know what your gains and loses! If your prediction proves to be wrong, you lose your initial deposit but if it proves to be correct your return on investment can never be over 100% of your initial deposit, making Binary Options safer but also less profitable.
CFD TRADING VS. BINARY OPTIONS TRADING | CFD TRADING
With CFD Trading you close your positions whenever you think it’s best, without expiry date. As CFDs are traded on Margin, you have the ability to control much larger trade volume than with Binary Options. Being leveraged, your gains can are magnified, meaning that your return on investment can rise up to over 500%! But unlike Binary Options where your loses are same as your initial deposit, with CFDs they can over exceed it. This makes them a bit more risky but also much more profitable.
CFD TRADING VS. BINARY OPTIONS TRADING | VERDICT
As they are both blessed with small start up capital and huge variety of markets, both CFD Trading and Binary Options Trading let you use your trading knowledge and skills wherever you think they will serve you best. They both include investing money behind your prediction in order to gain and they are undoubtedly best in it. Being so it’s hard to say which one is better or worse, they both have their pros and cons, with much more pros than cons if we might add…
The easiest way for you to determine which one to choose is by picking the one that satisfies your needs. If you are type of trader that likes to play it safer, that likes to have fixed risks and use his trading skills as secondary income than Binary Options will definitely feed your apetite.
But if you want to play a bit more ”dynamic” , having to control your risk in order to benefit, to use your trading skills and knowledge somewhere where it will definitely count the most and easily become your primary income… well that is where CFD Trading have no match! No trading instrument can nearly offer as much ”momentum” as CFDs can.
You see, the main difference between these two trading instruments is that while Binary Options provides you with more safer approach by limiting your gains and loses, it also limits your earning potential, meaning that no matter how good you are your gains will never be quite some. Great thing about CFD Trading is that CFDs don’t limit you in any way! If you want to play it safer like with Binary Options you can! You just need to manage your risks differently.
In another words, Binary Options can never ”rise up” to be as CFD Trading is and CFDs can always ”lower down” to Binary Options trading.