Are Binary Options A Form Of Gambling?
Whether Binary Options are gambling is a question asked far and wide. A question asked by traders, brokers, regulators, and other parties interested in binary options. So let's settle this once and for all, binary options ARE gambling. However, before you start picturing flashy lights and playing cards, let me further explain what this means.
First, let's take a look at the definition of "gamble" as defined by Merriam-Webster:
1. Something that could produce a desired result or a bad or unpleasant result.
a : an act having an element of risk.
b : something chancy.
2. The playing of a game of chance for stakes.
Are All Investments A Gamble?
Let's be honest, any investment activity is gambling. Venture capitalists also gamble when they invest into start-ups, there is no guarantee that the company will survive let alone bloom. Anyone offering guaranteed earnings or profit usually get locked up behind bars at one point or another. Especially if they add to that claim that there is absolutely no risk involved.
Be Smart, Manage Risk.
What you need to do as a smart investor/gambler, and what many do, is to manage and mitigate your risk. The risk will always be there and the higher the payouts the riskier the investment vehicle is. With binary options, the payouts are high but the risk is fixed. You will never lose more than what you've invested in one position. This is actually similar to bank deposits, you invest a certain amount of money, you may be protected up to a certain sum depending on your government, and the bank offers you a fixed annual percentage. However, with banks since the risk is relatively low so is the payout on those savings accounts. In most cases the payout doesn't even cover inflation.
Whether Binary Options are gambling is a question asked far and wide. A question asked by traders, brokers, regulators, and other parties interested in binary options. So let's settle this once and for all, binary options ARE gambling. However, before you start picturing flashy lights and playing cards, let me further explain what this means.
First, let's take a look at the definition of "gamble" as defined by Merriam-Webster: