Are you tired of having to cover a spread or pay a fee to invest your money? With Porter Finance, there is no spread. Learn everything you need to know in this article on the Porter Finance spread.
When trading conventional assets such as stocks, traders have to pay a spread. This means, at the same time, a broker is willing to sell you an asset at a higher price than the broker is willing to pay if it is buying the asset from you. Depending on the size of your broker’s spread, you might have to pay $100.20 to buy an asset, while you only get $99.80 if you are selling the asset.
Because of the spread, any asset has two prices at any given time: one price the broker is willing to pay for it, the bid price, and one price the broker is willing to sell for, the ask price.
When it comes to trading binary options, these two prices give brokers some room to trick you. For example, when you invest in rising prices, a broker could use the lower bid price to reduce your chances to win your option. Similarly, when you invest in falling prices, a broker could use the higher ask price to reduce your chances.
While these difference might not seem significant for one binary option, the power of compound interest can easily turn an additional losing trade every now and then into a huge loss over the time of a year or a trading career. Therefore, it is in your interest to have as little a spread as possible. The lower the spread, the more money you make.
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When it comes to the Porter Finance spread, it makes you the best offer you can get: Porter Finance uses no spread at all. Every price of an asset will at all times be calculated as the average of the ask price and the bid price, thereby giving you the best chances to make money and eliminating the possibility of any trickery.
This is the way things should be with binary options. Since conventional investments involve buying or selling a certain asset, a broker is entitled to a payment for their service, which is made by the spread. With binary options, however, you do not buy or sell an asset, you invest in a prediction based on an asset. This prediction is strictly between you and your broker. There are no third parties involved and your broker has no additional effort to get you your option.
Therefore, you should never trust any broker that uses a spread or any other form of fee for investing in a binary option. Porter Finance does things the right way.