Best way to rebut this statement against binary options?

""Binary options, no matter what broker/signals/robots/bullshit you use, are structured fundamentally such that they are gambling instruments. They are the equivalent of betting on coin flips, where you have a 50/50 chance of winning versus losing, but you risk 100% on a loss, and only stand to gain ~80% on a win.

50% of the time you lose 100%. The other 50% of the time you make 80%. (-1)(.5) + (.8)(.5) = -.1

This is the statistical calculation for expected payout. It is negative. Always. No matter what. No one who is in finance even considers binary options except to laugh at them."""

I keep telling him that you have to use the market as analysis and it takes a lot of strategies but hes persistent, but believes in Forex, LOL. So, whats the best answer to refute this and make him look stupid? :)

Comments

  • OkaneOkane Posts: 1,270 admin
    japhet said:

    ""Binary options, no matter what broker/signals/robots/bullshit you use, are structured fundamentally such that they are gambling instruments. They are the equivalent of betting on coin flips, where you have a 50/50 chance of winning versus losing, but you risk 100% on a loss, and only stand to gain ~80% on a win.

    50% of the time you lose 100%. The other 50% of the time you make 80%. (-1)(.5) + (.8)(.5) = -.1

    This is the statistical calculation for expected payout. It is negative. Always. No matter what. No one who is in finance even considers binary options except to laugh at them."""

    I keep telling him that you have to use the market as analysis and it takes a lot of strategies but hes persistent, but believes in Forex, LOL. So, whats the best answer to refute this and make him look stupid? :)

    Well, first of all, yes he is neglecting in his comment the fact that you don't just bet up and down but you actually do an analysis.
    So like you said yourself, his argument is flawed. However, it is truth that the outcome is negative unless you maintain a very high win rate in BO.
    Or you have to use bad money management (Martingale) to cover losses.
    In Forex, you can be profitable with a good risk to reward ratio with a very low win rate and therefore, in the long run it is a more sustainable and
    professional investing market.
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