BY JACOB MASLOW ON FEBRUARY 5, 2015 STREET INSIDER Usually, when people think of binary options, they often think in stereotypical terms. The stereotype of binary options is that this form of option trading is gambling. From several articles that were recently published, it appears that this is the consensus among market observers. Unfortunately, this is far from true. If you are to look at binary options from a cost benefit and risk analysis perspective, in many instances, it makes for a safer bet than stock trading. Think of it this way, if you’re going to be trading in stock, unless there’s a lot of volatility in the market and in the particular stock you bought, most of the time, you would be trading sideways. If you get in at $20, chances are you probably would have to wait quite a while for you to make 10% if that. Why? For the most part, the stock is just inching along up and down for a long time. It’s trading sideways. There’s lot of opportunity cost involved. You could have invested your money in other things for that amountof time you waited to get your 10% return. Moreover, that 10% return is never guaranteed. There are no guarantees in the stock market. This is why for the life of me, I can’t understand why people love to dump on binary options. Binary options give you only two outcomes. When you buy a position in a stock and bet that it’s going up or going down, you only have two outcomes. This completely vaporizes the prospects that you would have to wait and wait and wait as your stock trades sideways. You maximize your opportunity cost. Moreover, if you are studying a stock very carefully, and you study the general market trends, it’s unfair to say that you’re simply gambling. If you put in a binary option position on a particular stock because of its recent patterns, you are far from gambling. Chances are you have a big chance of calling the right direction for the market. Most importantly, binary options enable you to unlock a lot of the potential gains of the stock market. Instead of having to wait several weeks, if not months, to get a 10% gain, you can get upwards of an 85% gain off your investment in a single day. In many binary option platforms, you can even get that gain in a few hours. Whether you’re looking at time advantages as well as return on capital advantages, binary options have a lot to offer. Still, you can lose your principal if you call the market wrong. This is really no different from other forms of stock investment. The only difference is the timeline. You can lose everything with stocks if the timeline is stretched long enough. With binary options, the return window is shrunk so you can get an 85% return or not. However, the risk window is also magnified. Keep that in mind. A lot of people think that just because these are the key factors of binary options that these two factors alone make binary options a bad choice for everybody else. If you fit a certain risk profile, and .you’re okay with how binary options work, by all means, explore it. Jacob Maslow Jacob Maslow is our Editor, and has extensive experience with writing about global financial matters. Source.