binary Options and Risk Assets
Last modified: 13 June 2020
Your capital may be at risk. This material is not investment advice.
In simple terms, when a trader alludes to the fact that he or she is trading in risk assets, it means that the assets do not have definite returns in future. Such assets have returns that differ highly over time. The market conditions and dynamics highly affect the prices of risky assets. As a rule of the thumb, when IQ Option talks of risky assets, a South African trader should understand that as those securities and shares whose prices vary in a highly volatile manner. Moreover, the rate of return on the risky assets is usually greater than the rate of interest on the assets that are termed as safe. The high rate of return is deemed to be a compensation to the trader who dared to invest in such a risky venture. When it comes to stocks, the returns are variable dividends. In some other assets, the returns that a trader in South Africa expects are dependent on the assets’ price.
binary Options and Risk Assets enable traders to buy an option, which is purely based on a fundamental asset the risk asset- and make high returns on the same. According to the data provided by IQ Option, binary options garner a return on investment of over 80% if at all the risk asset moves towards the correct direction. The extent to which the risk asset moves does not matter as long as the move in price is in the direction anticipated. South African traders now know the amount of return to expect if at all the underlying asset was right and the price was rightly set.
IQ option defines an asset as a venture that delivers returns to the investor. An asset could be a rental building where the owner gets monthly rental income. Rental income is known and anticipated at the end of every month. There is no possibility of receiving a lower amount of money if the rented building remains with the same number of tenants.
However, as IQ Option trains South African traders, stocks are not as simple as that. The investor in stocks is not assured of the money that he or she will receive at every month end. Moreover, it is possible to make losses even after investing. Consider what happened to Toyota after nuclear reactors brought an end to the manufacturing of such cars across the world.
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.
binary Options and Risk Assets give traders in South Africa an insight on how to ensure profit in stock trading. binary options enhance the ability of a trader to make a profit even if the value of an asset falls and the trader had projected the fall appropriately. Therefore, if an asset’s value rises, a trader who has the stocks will make a profit. However, even if the value of the stock does not rise or fall, binary option makes it possible for the trader in South Africa to cover all losses and have some extra income. The returns on binary options are usually very high.