Buying Stocks With Cedar Finance
CedarFinance asked me to look at their binary option sales platform. In 2007, the SEC approved changes to the trading mechanism which allowed for the sales of binary options. For those of you that do not know, since most people do not, binary options are also called digital options or all-or-nothing options. (I am supposed to know this because I have a MBA.) In this connotation, binary is referring to the on and off nature of the option. Basically, if the option hits the contracted price, you get money. If not, you lose your money. Binary options tend to be high risk and high return.
Binary options are different than traditional stock options. With traditional options, you sell or buy the right to purchase a stock at a certain price. If the stock does not hit that point then there is no sale and the seller makes money. If the stock hits that price point then there is a sale and the buyer makes money by selling it at a higher price than it was purchased. For example, if I purchase the option to buy a stock at $10 per share and the stock goes up to $20, the seller still needs to sell me the stock at $10. Binary options are similar except that the all-or-nothing aspect makes it a bit riskier. Of course, in finance, higher risk means that when you hit it will give you a higher return.
Cedar Finance’s site seems nice in that it has a smooth platform and a low investment cost. In the old days, you needed several hundred dollars, often times a couple of thousand, to be able to trade options. With Cedar Finance, I am able to invest with only $100 or $200. I have never worked with an online brokerage before but I will admit that I like this setup. The site is robust with information and they have real customer service in case something problematic happens. If you have some money to invest, you may want to take a look at them.