Why Trading Digital Options Is Better Than Trading Stocks


When it comes to investing nowadays, many people narrow down their choices to two versions: digital options or stocks. If this describes where you’re currently at, know that digital options represent unprecedented opportunities. Let’s take a look at the four main reasons for why this is.

The Money to Start

There is no doubt about it: trading digital options is far cheaper than trading stocks. In fact, I’d go so far as to say that, for most people, there is no choice between digital options and stocks; it’s just not realistic to look at it this way. For those who want to actively trade and see returns in the near future, they must choose digital options.

That’s because to actively trade stocks is going to demand at least $10,000 upfront. You could go a lot less than that, but you’d also be limiting your flexibility to a degree that would most likely sabotage your efforts.

Range of Available Assets

When deciding on digital options or stocks, you have to realize that you’re looking at the choice between lots and lots of possible assets to trade and just a single kind. As you have probably heard a million times, diversifying your portfolio is essential to investment success.

A lot of people take that to mean that they should buy all different kinds of stocks. The truth, though, is that you want all different kinds of underlying assets. If the stock market takes a hit, all those different stocks are most likely going to suffer some degree of damage and leave you with a net loss.

On the other hand, with digital options, you can trade stocks, commodities, forex, etc. While you still want to take the time to educate yourself, all of these available assets not only give you the potential for an insanely diverse portfolio; they also mean you can drop out of one when the market is bad.

No Long-Term Requirements

This leads to another huge benefit of trading digital options. In short, you don’t have to hang on to them for months or years a time like you do with stocks and bonds. For beginners, this is great, because they learn the ropes that much quicker.

Whatever skill level you’re at, everyone loves that they can use shorter timeframes to make money, too. You don’t need to watch your stock go up and down for a prolonged period of time before finally deciding it’s time to make a trade.

Finally, as we alluded to earlier, these minimal timeframes mean you can easily ditch an entire underlying asset category without ruining your entire portfolio. For example, say the stock market is getting pounded. If you have a portfolio full of stocks, you can either dump them all (and probably take a loss) or hang onto them and hope for the best (hope you don’t need returns any time soon, too).

You never have long-term positions when trading digital options, though. If the stock market is falling, switch over to commodities where you know there will be ample opportunities to find healthy returns.

There’s Never a Bad Time to Trade Digital Options

Speaking of which, even if the stock market is in freefall, a savvy digital options trader will hang around. After all, you can always choose to bet against a stock, much like a short sale.

While this takes a bit more experience, if you focus on a specific market within an underlying asset class, it shouldn’t take you too long to learn how to anticipate which way it’s moving.

Every investor needs to take their own unique situation and financial goals into consideration before deciding how to invest. However, for most people looking at digital options or stocks, the former is clearly the winner.