My fiancé and I have been looking for ways to invest our money, which will allow us to atleast grow the few coins we have, so that we can have a nice wedding next year.
My fiancé isn’t too computer savvy and likes to stick to things he knows and is familiar with and has suggested conventional investing, while I know that the internet is booming and there certainly must be a lot of ways to make money online. During my search on the internet I came across Binary Options and I told him about it briefly and he seemed interested but still not too sure. So I decided to do as much research as possible and give my sweetheart a good sales pitch with all my amazing data and information that will surely convince him to invest my way.
Advertisements are everywhere on the net and the websites hosting these Binary platforms all state that it’s a quick and easy way of investing and that the returns are massive.
How this actually works… a binary option the way I understand it, is a type of stock option that pays a person if they correctly predict whether an asset or financial product will rise or fall on the stock exchange within a fixed period of time. You put a certain amount of money (anywhere between $10 and $200) into a specific asset and you see your return or profit even before making a purchase. You then choose if you think the asset will rise or fall and in what time this will happen (from 60 seconds to a day). If you predicted correctly within that time period you get paid out exactly what was agreed to but if you were incorrect in your prediction… you get nothing, and the money you put in is gone. Now many websites hosting these Binary platforms offer help by showing you which way many investors are buying, either for the asset rising or falling on the stock exchange, but they do not guarantee that by following this majority you will win.
Conventional investing works by putting money into an asset or financial product or buying a share of the asset/financial product with the expectation that the original amount you put in will generate a profit in a few months or years when sold at a higher price.
Looking at the advantages of binary options one can see that this is a short term investment where you get returns within 60 seconds to a day and you can invest in as many assets or financial products that you want and as many times a day as you want. To me this just sounded amazing… imagine how much money we could make?!!!
Conventional investing is obviously a long term investment where we would have to wait months to see the money we put in.
But then I started to think about and compare the risks of binary options and conventional investing.
Binary options means I will not own any of the financial assets/products and I will either win my money back with profits or lose all my money, while conventional investing means that I own a share of the financial asset/product and that even if stocks fall I can choose to keep my shares in the hope that it rises again or sell and atleast gain some of my money back.
But then I also started to think that all forms of investing comes with a risk and I was atleast willing to give this binary options thing a chance. I mean we could be making a lot of money here and I was really starting to imagine inviting 500 people to our wedding… LOL…
So then I starting thinking how I would fund and withdraw funds from these platforms, if the returns would be taxable and if this was regulated in my country and more importantly if it was safe giving these companies our money.
As I started researching further I discovered that Binary Options are regulated to ensure that there is fair play and that regulated companies cannot unfairly take your money. What I also discovered is that these regulations are only in a few countries like the USA, Europe and Cyprus. USA residents cannot invest or create accounts on platforms outside the United States and non-US citizens cannot create accounts on these USA regulated platforms. This is for safety and control of these platforms. Europe and Cyprus regulates their countries and accepts accounts from various places all over the world.
But what I found most interesting is that Binary Options platforms were at first regulated under the “Lottery and Gaming Authority”… and then I started thinking…. Hey! Wait a minute… using binary options I have to predict whether a stock will either rise or fall and damn… that’s betting isn’t it!
I won’t own any of the stock because I am not buying any but merely betting which way the stock will go. Then I started thinking, is binary options really investing or gambling??? And do I really want to tangle myself in this…
Honestly, I decided… rather not…
Fair enough, Binary options have now been declared a financial instrument and are no longer regulated under the Lottery and Gaming Authority but rather under the Securities and Exchange Commission. So this means that my money will be safe and that there will be fair play by regulated platforms but still, I wanted to invest… not to gamble.
So my fiancé asked me how my research was coming along and all I told him was that binary options is more of a gamble because you have to bet which way the stock will go. We both not gamblers and we don’t want to start now. We rather leave the gambling to those with a bit more money to lose or those with a bit more luck!
My fiancé’s cousin is some sort of a stock broker, nothing like the Wolf of Wall Street ;D, so we hoping that he can give us some pointers and help us invest our money wisely.
I would really like to hear your experience with binary options or investing in general, so feel free to comment.
Thanks for reading, until next time!