Should novice retail investors trade binary options?

Discussion in 'Stock Market Education' started by TradeProsper, Oct 16, 2014.

  1. TradeProsper

    TradeProsper New Member

    Sep 2014
    Likes Received:
    So I have a question,... I have been in the markets since 1997, and for the past 14 years focussed on derivatives. I find it fascinating how novice investors/traders flock towards Binary options. I personally do use them, and they are great for yield enhancement trades or creating specific payoff structures (like contingent premium vanillas etc).. buy really... for novice investors to just use them as outright directional plays as a stand alone strategy sounds crazy, to me at least...

    So wondering what am I missing? Has anyone looked at probability theory lately? Most new traders don't trade frequently enough to truly capture the stats inherent in these things, and I doubt accurate risk management is at the forefront? So what is it then??... purely the thrill of the game? The potential for big pay-outs with low initial investment?

    If you are a novice investor, please would you share your thoughts... I would love to gain some insight as to the spike in their popularity...

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