vaultAt the bottom of many binary options websites (the better ones anyway), there is a little link you will find which is labeled “Risk Warning,” or “Risk Disclaimer” or something similar. When you click on it, you will find a warning that trading binary options is a risky business and not suited for everyone, and that you can lose the entirety of your investment by participating.

All of this is true. Binary options trading does entail risk, and a substantial amount of it. There are a lot of things you can do to reduce your exposure to that risk and become more profitable. Some traders are so good at what they do that they are able to quit their day jobs eventually and do nothing but trade for a living. (Are you ready to do that?) But you may be asking yourself, “Why should I trade binary options with all that risk, instead of taking on a less risky investment?” Friends and family members you know may insist that you consider a “safe” investment like a mutual fund or a CD account. Odds are that most of the people you know who have invested in anything at all have invested in something more like that.

Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
200% $50 $10
 
85% $200 $20
 
85% $100 $5
 
85% $10 $1
 
95% $250 $1
 
80% $5 $1
 
80% - 90% $250 $5
 
85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
95% $250 $1
 
80% $10 $0.10
 
160% - 180% $50 $2
 
95% $250 $1
 
90% $250 $1
 
80% - 90% $250 $5
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
200% $50 $10
 
95% $250 $1
 
90% $50 $1
 
80% $5 $1
 
80% - 90% $250 $5
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  200% $50 $10
 
  85% $200 $20
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
200% $50 $10
 
85% $50 $1
 
85% $200 $20
 
85% $100 $5
 
95% $250 $1
 
85% $10 $1
 
80% $5 $1
 
80% - 90% $250 $5
 
80% $250 $25
 
85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
90% $50 $1
 
85% $100 $5
 
85% $10 $1
 
85% $50 $1
 
85% $200 $20
 
95% $250 $1
 
80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  85% $50 $1
 
  200% $50 $10
 
  95% $250 $1
 
  85% $200 $20
 
  85% $10 $1
 
  85% $100 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $250 $10
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  90% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $10 $1
 
  85% $50 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
85% $200 $20
 
85% $100 $5
 
95% $250 $1
 
80% - 90% $250 $5
 
85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $100 $5
 
  85% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  200% $50 $10
 
  85% $250 $10
 
  85% $50 $1
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
200% $50 $10
 
95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  200% $50 $10
 
  85% $250 $10
 
  85% $200 $20
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  85% $50 $1
 
  200% $50 $10
 
  85% $200 $20
 
  95% $250 $1
 
  85% $100 $5
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
95% $250 $1
 
85% $10 $1
 
80% - 90% $250 $5
 
85% $50 $1
 

 

Let’s take a look at some of these “safe” investment methods.

CD Accounts

Right now, if you look up the APY for a typical 1 year CD account, you will find that most rates come out to around one percent. Try putting this into a calculator, and you will find that if you put $1,000 into a CD account at that rate for one year, compounding daily, you will receiving a whopping $10 at the end of that year.

Say instead you are going to put your money into a CD account for five years, again starting with $1,000. Maybe your bank is willing to give you a higher rate for your account since your money is going away for longer. Consider a rate of five percent. After five years, your investment would yield $284. That is not a whole lot of money, not for five years of investment. Now consider that the five percent we just used is really not what you could expect from your average bank these days. You would be lucky to get two percent. That would yield around $105.

There was a time when CD accounts had much better interest rates. At that rate, standard savings accounts used to have much higher interest rates as well. Now however you really are not going to get much yield out of a CD account. So while it may be a safe place to put your money with no particular risk, it also isn’t going to give you anything much in the way of reward. Odds are you make around $100 in a day or two of work at your day job. Think about taking five years to make that amount. All that adds up to is doing a little overtime scattered over the next few years.

Mutual Funds

You probably know at least a few people who have had their money invested in mutual funds. When you put your money into a mutual fund, you are essentially trusting someone else to manage your account. Mutual funds are contributed to by various shareholders, and are professionally managed by expert traders. Usually you are given a few different options. You can choose investments which are more or less risky, and receive a return accordingly. The riskier the investment, the higher the potential return (and the more likely the loss). The “safe” options are usually the ones that pay out the least (but are most likely to pay out).

Mutual funds usually have some fees associated with them, generally annual maintenance fees. This is a minor drawback, but not necessarily a big deal in the grand scheme of things. Mutual funds can pay out well, depending on how wisely you choose your investments and how much you have to invest. They are a more sensible route than a CD account nowadays, because you have a much better chance at actually getting a reasonable yield (with a CD account, it is basically impossible these days).

What is the main drawback of a mutual account? It is that you are not doing your own trading. For a lot of people, this is going to be just fine. If you have no ambitions about trading, it makes more sense to pay someone else to do it for you. If you had no ambitions about trading, though, you wouldn’t be here, would you? You must have a real desire to jump into the market and learn this stuff. And if you do, you have the chance to have far more control over your finances and your future than you would by entrusting that future to somebody else.

Stocks

Stocks have been the default thing to invest in for millions of traders around the world for decades. A lot of people do not even realize that they can for example invest in commodities or currencies. Stocks however are arguably some of the most complex investments you can make. There is no reason you should not consider trading them (as with the mutual funds), and you can in fact trade stock-based binary options. Trading stocks is no more or less risky in the grand scheme of things though than trading binary options. What else can you trade? Find out here.

Real Estate

This was a favorite “safe” investment for many years for people all over the world, particularly in the USA. Right now unfortunately there is a housing bubble growing in Canada similar to the one which preceded the calamitous recession in the US a few years ago. A lot of people invested in houses with ballooning adjustable rate mortgages. Those houses were relatively inexpensive in the beginning, but became unbearably expensive later. Not only did a lot of homeowners fail to make bank with their real estate investments, but many of them actually ended up losing money. Worse, they became locked into their contracts with no way of getting out of them. This would be the equivalent of purchasing a binary option or a stock that you could not simply sell again.

Real estate was not a safe investment in the USA before the recession, and it is not one now. You will find fewer investments with more potential pitfalls and hazards than property. One might expect that the “foreclosed” signs all over the United States would
have taught a lesson, but you will still find a ton of people who swear that they are going to make their fortunes on real estate.

Is investing in binary options safe? Not really. You are taking on risk. But a lot of investors who stick to investments they consider to be “safe” are also taking on risks.
Not acknowledging risk is itself a way of increasing risk. Your awareness of your risk protects you from failure, especially if you take action to reduce your exposure. One great thing about trading binary options is that unlike the mutual fund investor, you are handling your account yourself. You are in control of your trades. Unlike the real estate investor, you are not locked into any long term contracts. Finally, unlike the CD account investor, you at least have a shot at making it big.

Did I mention that trading binary options is also better than gambling at an online casino?
Find out why here.