There’s no doubt that the Internet has opened so many opportunities for making money online. Recently people found out about new type of trading online called “binary options”.
Lets think a little different than usually people would think. In this article I am not talking about making money by trading binary options, I’m talking about becoming a publisher (mostly known as an affiliate). Is there another way how to make money from binary options than trading? So, how to make money with binary options?
There are going to be two scenarios that we’re going to dive into:
- You trade binary options and try to make money from trading.
- You create a website and become an affiliate.
Option #1 – Making money from trading binary options
If you decide that you want to trade binary options, you have a chance to get a profit up to 90% of your initial investment in less than one hour per one trade. Isn’t that an incredible way to multiply your money couple times every day? Interest rate can vary from broker to broker but usually it’s around 70-75%. So lets say that you find a broker which offers you to trade binary options with 75% profit if you’re in-the-money and 10% return if you’re out-of-the-money by trading usual up/down binary options. You decide that you want to give it a try and deposit a minimum amount, which in this case is going to be $200. $200 is the most frequent minimum deposit among binary brokers.
You are smart and you trade not more than 10% of your account balance on each trade. Simple math: $200 x 10% = $20.
Surprise, if 50% of your trades are successful then you are not making any money, you are not at a break even point, actually worse – you are losing. Here is an example if you would make 10 trades a day:
- Account balance: $200
- In-the-money profit: 5 x ($20 x 75%) = $75
- Out-of-the-money return: 5 x ($20 x 10%) = $10
- Out-of-the-money loss: 5 x (-$20) = -$100
- Total: $200 + $75 + $10 – $100 = $185 (From 10 trades you’ve lost $15 in total)
There are many brokers, many offers and lots of options so I created a formula where you can calculate your own situation and understand how many winning trades do you need to be profitable. You can play around with it in binary options calculator section.
In general, it’s not that easy to be always in-the-money and if we take the same example that we’ve discussed above, we need at least 55% successful trades to break even and more than 55% to begin profiting. But what if there’s a commission for every trade you make? What if there’s a commission for every withdrawal? Most likely even 60% of successful trades won’t make you richer than you were before.
Option #2 – Making money from becoming an affiliate
You heard about binary options and you like the idea. You see that the industry is growing like crazy and every day there are more people willing to learn binary options trading. Some of the industry trends can be seen on Google Trends. Wow, right? It’s the last moment to jump in the train and get your peace of the amazing pie. And you’re absolutely right.
You create a website about binary options where you can write whatever you want because it’s your website. So what if you create another reviews website? You find out about amazing deals that binary option brokers offer to their partners (affiliates). If someone goes through your website (your link) to a broker website and this person deposits the initial amount, it doesn’t matter if it’s the minimum or more, you get paid! Of course, a lot of companies work like this and the system is great. It gives you a possibility to earn some extra cash. But I want to warn you and explain something more.
Example with a publishing website
Lets take the same example that we’ve discussed above where you deposit $200 to your trading account with a broker. Now, assume that you’re a webmaster and you referred such person. If you’re the one who referred the person, most likely you (as an affiliate) would earn $100 fixed + 25% revenue share for a referral. If you have a large site, you can get more traffic and so on, then you could get a better commission deal.
I’m saying – most likely, because there are many offers out there and it depends, which broker you promote. The most popular brokers would have something similar to this and smaller brokers would have something like $50 + 20%. This is one of the reasons why do you usually see the same brokers in top 5 reviews on most websites. Usually there are no small brokers that you haven’t heard about. Because they cannot afford to pay large commissions to their partners.
Now, Lets Compare The 2 Options Discussed
What would you need to do to get up to $200 profit?
Option #1: If you stick to the same rule, that you invest $20 on each trade then you would need to get 14 successful trades straight without any mistakes. You would generate a profit of $210. But I’ve never seen anyone who has a success rate 100%. 70% is more realistic and in this case you would need to get 28 successful trades out of 40. That would give you a $204 profit.
Option #2: Assume that you promote one of the top 5 brokers. Easy math, you would need to refer 2 new clients and you’re done. $200 in your pocket without any risk losing your own money, and if these two clients turned out to be unsuccessful traders and they lose all their initial investment ($200 in this case) then you would get additional $100 from revenue share offer. $300 in total. I believe that this offer sounds much better, what do you think?
- I still believe that the industry is going to grow and the problem now is that there’s a huge chaos. Binary option affiliate programs are one of the highest paid programs in the industry but while the concept is new you need to be careful.
- There are not that many people out there who are willing to share their positive opinion about different companies online. Most of people who are sharing their experiences, unfortunately are those, who had problems. They are mad, and they want to take a revenge. Those who are happy, they live their life and don’t spend time on giving the world thousands of reviews in every website they see. But how come that there are so many websites where you can find only positive reviews and maybe few of them are negative? Simple! As I already mentioned, you are the boss of your website. You can write whatever you want or accept comments or reviews from whoever you want, and would you be interested in publishing bad comments or reviews about companies that pay you a high salary?
- Many webmasters, who have created websites about binary options, have no idea how to trade them and the only reason why they are doing this is because there’s a huge opportunity to earn high income as an affiliate. Do not trust every reviews website that you see.
I believe that this made your point of view more clear and now you understand how to make money from binary options. Be safe and tell your opinion what do you think. Good luck in both ways, no matter which one you choose!