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This statement shows a shallow understanding of binary options as well as financial instruments. There are a number of types of binary options and this article appears to imply that there is only one.
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There is also a Binary Options Exchange where you can be the writer and seller of binary options. Well, it is if you are just looking at the outcome of one individual trade in isolation.
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If on the other hand, you are trading a system that has a positive expectancy then the outcome of a large enough number of trades is not uncertain anymore — you will make money! I would like to offer a different and novel approach to understanding the nature of trading and gambling.
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To address the issue as to whether binary options are gambling or trading, you have systematically look at each category of binary options and decide whether you can develop a system that has a positive expectancy or not. If there does not exist a system of trading that has a positive expectancy, then you are gambling and what you are trading is not a financial instrument. If on the other hand, you can develop a system of trading that has a positive expectancy, then you are trading and what you are trading is a viable financial instrument.
If you take a look, on the surface, at trading binary options through an OTC over-the-counter binary options broker, it would appear that you may be gambling. This is because, on the other side of each of your trades, is the broker.
Such an approach is referred to as taking a calculated risk. Trading is no different to taking calculated risks. For example, one of the articles mentioned previously, we talk about how to profit from news trading and short term binary options contracts. Such kind of a strategy gives us a calculated risk. Meaning that, a trader invests an amount in hopes of making a profit based on a common underlying theme that plays out in the market day in and day out.
“IQ Option is gambling, lost it all”
When does trading become gambling? Trading becomes gambling when the trader begins to trade on emotions and gut feel. Greed and fear rule the emotions here and it is easy to get drawn into such type of trading. Unfortunately, most traders tend to fall for this trap, which is why it has led to so many critics that call for binary options or trading as a whole as gambling and nothing more.
A gambler would trade simply based on gut feel or be engulfed by emotions and starts to trade CALL and PUT options for example with no real reason why. A trader on the other hand, researches, calculates the risk and ensure s that the trade that they make gives back more than the amount that they risk.
Recommended by ProfitF :. Trading Forex, Binary Options - high level of risk. Please remember these are volatile instruments and there is a high risk of losing your initial investment on each individual transaction. Binary options and Gambling There are many articles circulating on the Internet these days that tend to equate.
Calculated Risks One element that is common to the above is risk. Conclusion A gambler would trade simply based on gut feel or be engulfed by emotions and starts to trade CALL and PUT options for example with no real reason why. Once a trader understands this basic philosophy, trading no longer becomes gambling. Add your review Cancel reply Your email address will not be published.
Binary options are no coin flip
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