The emergence of binary betting as a preferred derivative product and its popularity is not surprising when one considers that the trader would know for sure the amount that he stands to gain or lose the moment he places the bet. The fact that the volatility in the market will not affect him very much is one of the main reasons why this form of betting is being preferred by many traders. Moreover the simplicity of the process is another reason as the trader does not have to do any complicated analysis or refer to charts to do binary betting.
On the other hand, CFDs or contracts for difference is a leveraged product allowing a trader to speculate over the price movement of an asset class and here the scope for winning or losing is uncapped, making it risky. The trader can speculate over a much longer period of time as compared to binary betting which is designed for short term speculation.
It is however the tax implications that gives binary betting over contracts for difference. In CFDs, though there is no stamp duty levied, you can still be charged the capital gains tax. Binary betting is not subject to any tax since it is considered as a gambling instrument and therefore any gains you make, you get to keep them in full.
Binaries as form of financial spread betting is also advantageous from the perspective of any interest costs that you would have to pay when it comes to CFD trading. When you do CFD trading, you are taking a leveraged position from the broker and have to therefore pay some interest carry cost and this will impact your overall profit.
Having said the above, all is not lost when it comes to CFD trading. On a good day, the uncapped earning potential of CFDs is a great advantage which binary betting can never provide. Binary betting gives you the opportunity to get a fixed profit and is ideal for those who are risk averse.
Ultimately, it is up to the trader and his mental psyche as well as the funds he can deploy that will decide whether he chooses binaries or CFDs. If somebody has just lost money on CFD trading and yet wants to trade, he can do some binary betting for some time to recoup some of the losses before making another attempt with CFD trading. Both are great products that have become very popular for traders.
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Pros and Cons of Binary Spread Betting Vs CFDS hace 6 años, 9 meses
