In this modern fast moving world, many individuals are seeking quick ways to make money. Though the share market and the real estate market offer fast ways to earn money in a short time, but the risk/reward ratio is very high in these markets. Investors run the risk of losing their entire capital within no time, if the market moves unfavorably. In such a situation, binary option trading is the best alternative to earn quick money. Moreover, the binary options risk to reward ratio is favorable. Let us understand the risk to reward ratio in the binary option market.

Put simply, a ratio is used by an investor to assess expected returns of an investment in comparison to the extent of risk undertaken to earn those returns. Calculating the ratio is very simple. It is calculated by dividing the amount of money an investor expects to lose when the price of the asset moves unfavorably (the risk) by the amount of money (profit) the trader anticipates to have made on closing the trading position.

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