If you’re going to trade Kospi binary options you must first have an understanding of the South Korean economy as a whole. While most Indices represent the relative strength (or weakness) of that country’s largest companies, as an investor in binary options you should not forget that the companies in question help drive the economy and can be impacted by changes in it, so it is crucial that you have knowledge of the economy prior to investing in the index you’re after.
South Korea is a rather unique bird in the economy world, it is ranked as the 14th or 15th largest country in the world in terms of GDP (depending on which agency’s ranking you’re looking at) but, unlike the majority of the other countries located ahead of it South Korea has few natural resources, it occupies a relatively small area and has a workforce that is not that sizeable when compared to some of the others which begs the question – how does a country that is 109th in size, 26th in population and is less than 70 years old manage to do so well for itself so quickly?
To put things in perspective, just ahead of South Korea on the GDP list we’ll find Mexico, which is 14th in size, 11th in population, has been around in one form or another for at least a couple of thousands of years and has a bountiful country and massive areas to develop.
Some may call such a leap in a country’s economy a miracle, and Korean’s actually do, they refer to the country’s period of spectacular economic growth between the 1960’s and 1990’s as the “Miracle on the Han river”, during which, the yearly growth rate for South Korea’s economy was consistently above 10%.
The South Korean economy is mostly driven by 4 major “Chaebol” or conglomerates that have vast areas of expertise and control in practically every corner of the globe, these Chaebol include market giants such as Samsung, LG, Hyundai and others.
As you may have guessed by the names above, South Korea’s biggest means of increasing its market size and profits mainly revolve around the exporting the products of these Chaebol throughout the world, but while most of us think of Samsung and LG as the manufactures of various electronics, and Hyundai as car makers, the truth is that all of those companies also produce a much wider array of items that range from ships, thought concrete works for massive projects all the way to medical equipment with many other areas in-between.
With all that information in mind, it is quite easy to understand why an investment in the South Korean Kospi binary options can easily be worth your while – the economy itself appears to be very stable and the indicators for success or failure are relatively easy to keep track of – just follow the major Chaebol, along with the economic state of the country as a whole, and you should be well on your way to success.