Here is the new "invention" of internet stock, or more specifically, about the options. The Binary Options.
Like all new inventions that are "easy" to understand (and true to its advertising), I've allowed me the freedom to analyze and confirm whether it is a good form of investment.
First I'll do a review of what what are the options .
The option contract (purchase or sale) contract is a possibility, after a certain time, to either buy or sell a particular asset (underlying) at a given price in the contract. How the goods are not bought or sold but is still a possibility to formalize the contract anticipates only premium leaving the rest to be due to the date of the contract. Arrival date can be bought or not depending on what is most profitable and, if not to buy or sell because it would cost, you'll only lose the premium.
The gain or loss is obtained in two ways in options contracts (like in the future). The first performance of the contract (at maturity) buying or selling the underlying at the agreed price by the difference between the actual price of the profit or loss, in this way, the profit / loss is not much different from buying or selling the underlying with the difference that if loss can not perform the contract (as opposed to the future in which we are forced to). The second option is trading the and, as time passes, may revalue or underestimated in the secondary market and can be sold at a price greater or less than it was purchased (always referring to what you are doing the underlying) and in this way the profit can be made before and loss control.
What is a Binary Option?
From the website from where it operates or has invented this product is described as: a contract that gives the buyer (known here as an investor) the right to buy an underlying asset at a fixed price within a specified period for us, the seller.
This is not true, actually. As with warrants never get to buy the underlying but is ultimately a business for differences.
The binary options are also known as digital options, fixed return options, or options "all or nothing." Of all the alternative names that best defines them is that of all or nothing options and more cheats (Though partly true) the fixed return options.
In options, when it comes to maturity of the contract does not seem profitable simply can not perform the contract thereby loses the raw signal. In the binary options and does not pass any premium (as it is not intended to buy any behind) when the contract is to "offset" automatically come at maturity (one hour, week or month) earning or wandering the agreement or almost all of the Submissions. There would be a real bonus if option contract and promised to achieve the same, the possibility of buy the underlying (giving the rest of the agreement).
In any case, and here the big difference with all other financial products, you insured gain or loss and hence the so-called or self-proclaimed (because they know the origin of the name) return options Fixed (does seek the confusion with the reference to a fixed gain?) and more correct option all or nothing, why?
For if the bid is successful will guarantee the rate of return of between 65% to 71% and if it is so successful it can lose 85% of the bet (or return you 15% of the investment).
Do you gamble?
Ultimately this product is more like a bet type odd / even, red / black, if you call up / put if low. In one example of a web bet of 1,000 € and time of maturity, ranging from one hour a week or a month, if it succeeds could earn up to 710 € (up to 71% benefit, a total of 1,710 €) and if it fails you can lose up to € 850 (up to 85% of the investment) and as a result be 150 €.
From my point of view is not a good investment as gambling (no uncertainty) does not grant me any kind of investment. But if someone wants to try his luck, go ahead, but just tell that sometimes you can win or lose others. If you are able to make a system able to "break the bank" as the famous Pelayo, then yes it would be a good investment. For me, no.
Anyone want to play?
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