Binary Options Vs Spread Betting

Both binary options trading and spread betting have gained steam in recent years as popular ways for people to earn extra income from financial markets. While on the surface online options trading and online spread betting seem to be remarkably similar, there are actually some significant difference between the two that you should know about before exploring these options further.

Binary options are a relatively new online financial product where traders make predictions on whether a stock, bond, index, commodity, or currency is going to go up or down in price over a period of time. There are only two possible outcomes to the trade, the trader is correct and earns a pre-determined profit amount, or they are wrong and lose their initial investment in the option.

Online options trading is a serious method of investing, one which involves undertaking an arduous study of financial markets and individual price patterns. It is an ideal way for people to invest money in the financial markets and turn a profit without exposing themselves to the huge amount of risk that normally accompanies investing.

On the other hand, spread betting is much more like gambling. With spread betting, you not only have the opportunity to make predictions about the price movements of various financial products, but also events in sports and politics. You don’t bet on a general outcome, but on a specific event happening or not.

One of the advantages of spread betting is that while bettors have a smaller rate of success, they are able to earn huge amounts in a single bet. When you trade binary options, you can only earn one pre-set profit percentage, but with spread betting you can win hundreds of times your initial bet. But no matter which you choose, profits are out there.