Why investors invest in penny stocks? Because, penny stocks are known to give phenomenal return like 100%, 200%, 500% or even 1000% and more in just a matter of days. Penny stock prices range from a few cents upto $ 5 per share. But the problem with the penny stocks is that most of them are illiquid and get traded at the Over The Counter Bulletin Board (OTCBB) and Pink Sheets that are not highly regulated like the regular stocks exchanges Another problem is to find those hot penny stocks that are selling for pennies but have the potential to sky rocket in the next few days to the next few weeks.
But there is now another form of investment that is available that can make you a much higher return per day as compared to the penny stocks. You do not need to wait for days to get a high return with this new form of online trading. This form of online trading is not known to many investors. So what is this form of online investing?
I am talking about Binary Options that are also known as Digital Options. With Binary Options, you just need to bet on the direction of the market. You are not buying any asset. You are just betting on the market direction in the next half an hour, next hour, next four hours, next 24 hours or the next few days, whatever, suits your bet.
Let's make this clear with an example. You must have heard about Google Stock GOOG. Yes, right now, it is trading around $ 600 per share. You want to invest in GOOG? Why not trade binary options on GOOG. Suppose, yesterday GOOG closed at $ 617 per share. You think that it will go as high as $ 630 per share in the first few hours of trading today. You purchase one binary options contract on GOOG with expiry of one hour and strike price of $ 625 per share.
After one hour, if the price of GOOG is at suppose $ 626 per share. You won your bet and made $ 100 on the contract. Suppose, you had bought the binary options contract on GOOG for $ 20. Your NET PROFIT is $ 80 in just 1 hour. Now suppose, instead of just 1, you had bought 10 contract of GOOG. This would have costed you $ 200 and you would have made a nice profit of $ 800 in just 1 hour. Do it again in the next hour and you could have made another $ 800 making you a nice profit of $ 1,600 in just 2 hours.
Of course, if the price of GOOG had not moved much and ended up at $ 620 per share. You would have lost your investment of $ 20 per share. Whatever, if you can master the art of predicting the market direction, you can make good money with binary options daily unlike penny stocks that may or may not move in the next few days.