You know the saying: But binary options trading does just that. The investment strategy is frequently compared to gambling, for good reason: Investors are placing a bet on how a market or asset will move in the very near future. We strongly recommend a portfolio of index funds for long-term goals like retirement.
But if you have some extra cash and you want to ease into options trading , binary options contracts can be a decent way to do it. Limited, but far from nonexistent. The largest regulated binary options broker in the U. That strike price is 2,, and the expiration is 3 p. If you think the answer is yes, you buy the option. If you think the answer is no, you sell the option.
You can also exit the trade early at some brokers, which will cut your losses if your prediction looks to be wrong, or lock in a profit if your prediction appears to be trending toward correct. Therein lies the issue. The key here is research. The goal is to make what your elementary-school science teacher probably called an educated guess.
To do that, you should:. As with any investment, there are pros and cons, risks and rewards here. See the Best Online Trading Platforms. See the Best Brokers for Beginners. We want to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and safe by following our posting guidelines , and avoid disclosing personal or sensitive information such as bank account or phone numbers.
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