A new wave hit forex investment industry – binary option trading. What is binary options trading? How is it different from other types of trading? What is the potential profit? What are the risks?
What are Binary Options?
Binary Options trading, also referred to as Digital Options, Fixed Return Options or all-or-nothing options is the way of trading for both expert and less experienced. A trader receives a fixed, pre-defined return in case the price of the selected asset goes above or below the strike price.
WARNING: YOUR CAPITAL MIGHT BE AT RISK
Fixed return may vary from 65%* to 85%*, or even more. In the matter of minutes, you can almost double your investment amount though there are chances of loss also. There can be only 1 outcome with binary options trading – either yes or no, correct or wrong, win or lose, all or nothing. The idea is to predict which way the price of forex, stock, commodity, index will turn to before the expiration time. While with regular trading you purchase the asset, with binary options you only forecast the direction outcome. So in order to be successful, you need to make a correct choice – up or down.
With regular trading, the movement of the market is important. This is what affects your overall profit at the end of the trade. With binary options, however, each contract expires on hourly or daily basis and forms your profits (or losses). The scale of the movement doesn’t matter, but rather the outcome.
Minimum deposit requirement with most brokers starts from $10 or the equivalent in other currency. Most major credit cards are accepted for deposits and withdrawals.
Why Binary Options are Useful?
Can trade different markets
You have access to forex, stock, indices, and commodities.
You can control the risk
Trader is in full control of how much can be lost, because the percentage reword is known right from the start. Will this currency pair increase/decrease until the time expires? It is a straightforward yes/no proposition.
The profit potential is good. In the money trade brings the entire payoff even if the market moved only by 1 pip in your direction.
Binary options trading contracts are available 24/7, allowing traders to trade on multiple time frames. By the time there is an expiration deadline on one of your contracts, new opportunities are there to take advantage of.
Binary Options Terms
The market price quoted by your binary option broker shows the current value of the selected asset based on feed data provider.
High/Low instrument option which usually offers 85%* profit return if the selected asset expires lower than the target price.
The amount of money you choose to invest in the preferred asset option.
Boundary option usually offers 85%* profit return if the selected asset expires “Inbound”, meaning in the range between upper and lower target values.
An option on a High/Low instrument offering a fixed return of up to 85% returns if the underlying asset expires at a higher level than the option target price.
Binary Options Trading
Choosing the right binary option brokers for you is the first step towards the new investment opportunities. The brokers listed on this site provide different features and wide selection of trading options. Traders can browse through the reviews and compare binary options brokers reviews by the services, tools, return percentage and other features. The best binary options brokers usually offer different trading time frames, such as hourly, weekly, monthly and 60 seconds trading. All brokers work with the following types of assets – stocks, commodities, indices, and forex. The accepted payment method is usually major credit cards, while some brokers also provide alternative methods such as Moneybookers and Paypal.
How to Choose Best Binary Options Brokers in 2018
While you shop for the top binary options brokers to explore new profit opportunities, this websites provides useful suggestions and reviews. We focus primary in helping traders choose the best broker. Below are several important parameters that you should consider when choosing a binary options broker:
In the perfect world you would expect binary options brokers to be regulated, however most of them aren’t. There are advantages and disadvantages in that. Brokers that are regulated, for example, would not accept US traders, while the offshore unregulated companies registered in Cyprus, Gibraltar, Cayman Islands etc. accept traders without exceptions. While regulated brokers ensure the security of your funds, they might adopt strict rules and trading conditions to follow the regulations. Once again, this is a debatable area.
A good binary options broker has to provide responsive, professional customer assistance. Unfortunately not all brokers handle customer live chats, email and phone requests in a prompt and respectful manner. Make sure to check the customer support after you have made a deposit, because sometimes and support staff is helpful up until you add funds to your account, after which you are unable to receive a proper answer to any of your questions.
Types of Binary Options
Not all brokers offer the full range of trade types. The top brokers offer a wide range of trading options which brings you the flexibility and variety of the binary options market.
There are the classic binary options with 75%* – 90%* return. A trader needs to predict the direction of the price of an asset by the time of expiration (above or below the predetermined strike price).
Touch trading is when a trader predicts whether the asset will touch a set price any time before the expiration. Range Trading is when a trader predicts whether the asset will expire within a predetermined range. 60 Seconds trading allows you to determine whether the price of the asset will go uptrend or downtrend within predetermined time of 60 seconds. Option Builder is when you can customize the trade to fit your needs from time frame to expiry time.
There are also 2 very useful features that professional binary options brokers offer – Double Up (this allows you to increase your initial investment in the middle of a trade when you are determined that your trade is in a winning position) and Roll Over (this options is great to move the expiry time further away in case you see that the trade doesn’t go along with your forecast. It basically buys you more time).
The quality and easiness of the trading platform is very important. The last thing you need is a complicated navigation and confusing features. Also, today most brokers offer mobile version of their trading platform which is extremely useful to trade on the go. Today most of us use smartphones which allow us to monitor trades wherever we are.
Payouts and Refunds
There are several payout structures in binary options market. Some brokers provide different types of trading accompanied with wide variety of payout percentage. Starting from 75%* profits and return on the initial investment.
Best binary option brokers offer up to 10% of refunds on the lost trade. This shows commitment and professionalism towards the customers – two very important characteristics a professional broker should possess.
General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
*Means:- amount to be credited to the account for a successful trade.