BOcapital.com is a new online trading site that specializes in binary options. Trading options is extremely complex, and is generally meant for only the most experienced and knowledgeable of traders. In the simplest terms, trading options is similar to placing bets on the movements of various stocks.
A binary option is different than regular options because you only have two outcomes: right and wrong. Either you correctly predict the movement of a stock’s value over a particular time period, or you don’t. If you do, you make money. If you don’t, you lose money. As there is only two options, this type of trading is referred to as “binary.”
The benefit to binary trading is that you know exactly how much money you will make or lose depending on whether your prediction is right or wrong. At Bo Capital, if you correctly choose whether the asset will grow or decline in value, you can earn between 65%-81% of your initial investment. You can place anywhere between $10-$1000 in a single investment. If you are interested in trading at even higher values, you are welcome to do so, but they must be done in separate investments.
How Does BOcapital Address the Dangers of Options Trading?
Options trading can be so complex and potentially dangerous that it is not recommended for anyone other than an experienced, knowledgeable trader. BoCapital tries to take the danger out of options trading first by limiting them to binary options (you win or you lose, no middle ground) and by shortening the expiry time to the length of only one hour.
They claim that they will let you investigate and gather knowledge on the stock or asset before you make your choice, to invest in whether the stock will grow or decline over the course of an hour. In addition, they have two additional features, Close Out and Extend.
If you wish to close out your option at 50 mins instead of 60, you may choose to use the Close Out function for an extra cost to ensure you close out in the black. If you are coming up on 60 mins and you are about to lose your investment, you can choose to Extend your expiration time for an additional cost. It is not clear what these costs would be.
The Bottom Line on Trading Binary Options
Despite the best efforts of Bo Capital, trading binary options is still incredibly high risk. First of all, trading binary options is very similar to gambling. The idea that you can look at the recent history of a stock to correctly predict what it will do in the next hour is more about building your confidence than really giving you an edge on making the correct call.
The truth is that the stock market is incredibly volatile, and a multitude of things can make an immediate impact on a stock. Look at the recent issue with the Proctor & Gamble stock being severely devalued due to a “glitch.” The existence of glitches and errors are stock market realities, and if you lose your investment due to one of these errors, you have no recourse. They are part of the market.
When it comes to binary options trading, even an increase or decrease of .00001 will cause you to make or lose your money, and an increase or decrease of a fraction that small is incredibly difficult to predict.