Difference between Forex and Binary Options
On many forums available on the internet, inexperienced investors ask the difference between the forex and binary options. If users can often see advertisements on these types of investments, they do not yet have any connection between them. For a gardener, this would compare apples and pears. After comparing the binary options with conventional options, here's a new comparison.Differences
To enable you to understand the difference, we will return to the definitions of the two:
- Forex (short for "Forex Exchange" ) is a market. An investor who deals with the "Forex" is active in the foreign exchange market only (euro/dollar ...). It can directly invest in the underlying asset (EUR/USD, ...), or invest in derivatives (options ...). It may even possibly deal with binary options they have for the conditions underlying currency!
- Binary options are a type of investment : they are available on different underlying (Forex, commodities, equities) and help create an important leverage and can generate very attractive returns. It is a derivative whose value is the underlying derivative. Note that in most cases, you can not exit a position binary options (it takes maturity, also known as "maturity").