Binary Options is a type of a financial option that estimates the underlying assets within standard time frame. Forex trading on the other hand is more variable and it is necessary to understand the differences between each of them.
Binary Options: A lot of binary options are available which gives you a variety to choose from which include the call/put or the high/low also known as up/down. However, other types of orders may or may not be available at binary option brokers.
Forex: There are different order types available for Forex trading as well and the best thing about it is that they easily accessible. The buy-sell orders are considered to be one of the most important order types in Forex trading and there are other options offered such as trailing stop, limit and others.
PAYOUT AND LOSSES
Binary Options: Changing the value of the assets determines the value of the profit or loss. Whenever the value increases at the time the investor sells the asset back to the market then that means they’re making profit or the other way around if the value decreases whenever they sell the asset back to the market then it’s a loss.
Forex: In here, you can make a trade without limits of the maximum profit. You have the ability to control the order from a particular profit percentage by setting a stop or limit on it once it has been executed. There is a maximum loss that could be all of the trading funds in individual’s account but you can be able to manage the losses in Forex trading through stop and limit orders just exactly as how profit is managed.
SIZE OF TRADES
Binary Options: There is a maximum and minimum trading size in every binary options broker. It could be $5 as the minimum per trade and for the maximum it can be $5,000 or more.
Forex: 1,000 of the base currency were usually being offered by brokers as micro lots and they also set the maximum that can be as much as 100 standard lots which is equivalent to $10 million.
Binary Options: There’s nothing to worry about a margin call because margins are not being used in a binary option. You can be able to make 65% to 100% on standard options which are definitely attractive to traders even without margins.
Forex: The maximum margin is set by the broker and you can place larger trades which yield higher returns since Margins enable you to increase your trading capital.