Benefits of Binary Options

Limited Risk, Better Protection Than a Stop-Loss, and Virtually Limitless Trading Opportunities

Binary options offer individual traders a new, innovative way to participate in the markets with limited risk, protection against volatility, and the ability to profit from short-term market moves—up, down, or sideways.

With Nadex binaries, you know your maximum potential profit and loss before you enter the trade. This allows you to calculate risk/reward with precision. Since the trade is fully paid for up front, you never get a margin call.

And if the market suddenly makes a huge move against you, you know that your losses are limited and, even better, your option is still active, meaning you are still in the trade if the market turns back in your direction. You get better protection than a stop-loss order, without getting stopped out.

Multiple Trading Opportunities Daily

Binary options give you multiple opportunities to trade throughout the day and the week. You can choose time frames ranging from five minutes to two hours throughout our 23-hour trading day, as well as daily and weekly. Each time frame has its advantages. Our extensive Learning Center will help you learn how to find them.

With binary options, you make a yes/no decision about a market’s direction and get a relatively quick result. At expiration, the market only has to be one tick in your favor for you to get the full payout of $100 per contract. In effect, you only have to be a little bit right to get the maximum profit. And you also have the flexibility to exit a trade early, either to lock in profits or cut your losses.

 

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Protection Better than a Stop-Loss

Most traders know the risk of large, fast market moves that go against your position. Even if you set a stop-loss order, you can lose more than your account balance and get a margin call from your broker. This is the “unlimited risk” mentioned in disclaimers.

Enter at the wrong place and time and you can be right, but get taken out without profiting from being right. The built-in loss protection of the binary option is more forgiving. It won't punish you for being right, but early or off by a few ticks in your order placement.

Binary options have limited risk. Your maximum possible loss is the amount you paid to buy or sell the option. Better still, you won’t get stopped out, even if the market makes a huge move against you. 

Never Get Stopped Out Again

When the market moves against your position, you face a loss that could be devastating. Traditionally, you use a stop-loss order to get out with a manageable loss.

However, in futures, forex, or stock ETFs, your stop-loss sometimes gets filled for a big loss. In a fast market, your stop can get triggered only to have the market turn around and become profitable again.

Our binary option and spread contracts have built-in floor and ceiling levels. You know your maximum potential profit or loss in advance. Unless you close your position early, it remains open until expiration. You never get stopped out, no matter how much the market moves against you. And you won't lose more than you paid to enter the trade.

Opportunities in Flat Markets

With binary options, you can profit even when the market moves just a little, or not at all. The essence of trading is buy low, sell high, and keep the difference as profit. You need the market to move enough for reward to outweigh risk.

With flat markets, it can be hard to find a low and high far enough apart to be profitable. And in volatile markets, you might find yourself taking on an unreasonable risk for a relatively small reward.

Nadex binary options can provide profit opportunities even when the underlying market does not. The all-or-nothing outcome means that even if the underlying market is just one tick above the strike price (and you are a buyer), you will still get the full $100 payout.