How many times have you heard that option trading is like an online casino? How often have you heard this from those not affiliated with the finance industry? How many times have you heard that same line from professionals who are involved in the finance industry, but who have limited or no knowledge of option trading? How often have you explained that option trading does not resemble a casino, but just couldn't convince them?

The casino comparison indicates a lack of understanding. When used by professionals in the finance sector, it can only indicate ignorance. Option trading is a business, just like any other, with expenses on one side with income on the other. Like many other businesses, it might have no physical goods, but will have buying and selling operations.

Option trading is no more like a casino than any other business. If you have no knowledge of the field you are entering, then any business has the potential of feeling like a casino. On the other hand, if one has knowledge and tools of the trade in this particular field, one will understand how money is earned or lost. I wonder if the same uneducated financial advisors who are labeling option trading as dangerous are advising their clients to ignore other investment opportunities, such as opening a business.

Consider restaurants. Currently 80-90% of all restaurants that open will fail within the first three to five years. A financial advisor would probably explain to their client that it's a risky endeavor, especially if this investor has no knowledge of the restaurant business.

Why, may I ask, is option trading a casino, and opening a restaurant is not? The answer must lie here: The two industries seem similar insofar as you place your investment and play against the odds. But if neither offers any services or goods, then what kind of businesses it, and what does it provide?

The entire financial sector is one large business. This business is complete with expenses and income, good days and bad. For that business to be successful, those overseeing its operations must learn and understand the field, understand the market and be knowledgeable of all major factors to ensure its success.

Buying and selling dollars and pounds just like that, without that business knowledge and understanding, is in fact gambling. Opening a restaurant, hiring a kitchen and wait staff and all other overhead involved is a gamble, a risk – and thus, a casino. But it is also an investment.

Don't understand option trading? Read about it, learn about it, become as knowledgeable as you can before investing your money. Then and only then are your chances of succeeding higher than your chances of failure.

Remember, the only real casinos are in Las Vegas.

Oren Laurent

CEO

Banc De Binary

(Oren can be reached at info@bbinary.com)

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