Is Binary Options Considered Gambling?
One question I get asked a lot is, “Is Binary Options Gambling?” the answer is simple. Casino games are nothing like trading binary options or like online football betting. Taking positions in the market vs betting on roulette is not the same. In casino games the house has the edge and the house always win in the end.
One of the most simple and less risky methods of trading as compared to conventional forex trading is binary options. Like other options this type of trading also has an expiration date and strike price but what is different is that traders receive a fixed payoff. This could be $0 if the price of a currency pair doesn’t reach the strike price by the time of expiration or a percentage as high as 60 to 85% or more if the price does reach the strike price.
What are Binary Options Bets?
There are two easy ways to describe a Binary option:
1. Binary Options Bets let you bet on speculation. Just a simple prediction on a certain asset whether it will go up or down in price, without actually purchasing any stock.
2. Simply all you are doing is purchasing the stock temporarily with a prediction of the assets price. Just determine whether the asset will rise or fall in price in a short period of time.
There are only two basic options with a Binary Options Bets trade and they are Call or Put.
Call . this is when you would predict your asset price to go up.
Put . this is when you would predict your asset price to go down.
What is the difference between gambling and investing?
According to the dictionary:
• Gamble . “To play at any game of chance for stakes. To stake or risk money, or anything of value, on the outcome of something involving chance.”
• Invest . ”To put money to use, by purchase or expenditure, in something offering profitable returns.”
When it comes to binary options is hard not to get addicted specially when you’re profiting a couple hundred dollars a day, but remember that all business ventures contain some element of risk and trading binary options is no different.
An investment is simply a gamble in which you’ve managed to tilt the odds in your favor. Investing is based on skills and requires the use of a system based on research, while gambling is based on luck and emotions.
Remember gambling is entertainment, investing is business.