Binary Options Trading & Best Binary Brokers
Binary Options trading, sometimes confused with Options, is different from any other types of derivative trading. This new way to trade within the financial markets is growing rapidly accross the globe. Being legalized in the US in year 2008, Binary trading has become the easiest and fastest ways to trade these days.
So what makes them different from other trading? It is because with these you are not actually taking ownership of any assets but you are attempting to predict the movement of the underlying asset only. It is a type of prediction or a bet on which way a particular asset is going to move and is also considered less of a long term investment.
Being a new trader, binaries have lot to offer to you as binary options have huge possibilities of profits and because of their all or nothing nature, there is also the chance that you can lose substantial amounts of money.
Thus if we define Binary as a type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes/no proposition, hence “binary”. A binary option automatically exercises, meaning the option holder does not have the choice to buy or sell the underlying asset.
Let us understand this trade and have an understanding of what it is all about and how it works better in trading and if you choose to look for Binary broker then what all you need to know.
How does Binary Option Trading Works in 3 Easy Steps
The three easy steps as how does Binary Option Trading Works is as follows:
Choose from among the available underlying assets such as currency pairs, stocks, indices and commodities.
Select an expiry time frame from the binary
Pick a call or Put Option Call binary if you think the market will rise by expiration or a Put Binary if you think the market will fall. Now enter your desired premium investment amount that represents your risk on the binary option purchase.
Why to trade Binaries?
When you have understood what are Binary options you obviously will have the curiosity to know as why to trade Binaries?
As the word “Binary” means two. Similarly Binary options are also known as two-way options, are among the easiest and most convenient options to trade.
To maximize the benefits of trading binary options, you should choose a good Binary Options trading platform.
With a good platform, you’ll earn profits quickly and with a short trading period. With binary options trading, you can take advantage of the fact that returns are always fixed. You’ll always get the same return on investment, or ROI, regardless of the amount of your investment.
There’s no spread, so identical prices are given for put options and call options.
You can access the platform from absolutely anywhere. You just need a computer and an Internet connection.
If you choose the right direction you can make your profit
You are flexible to choose as with online trading you are not limited to one market. You can trade Forex, Indices and Commodities. You can chose your style of trading and adopt it
As you have full control to monitor your trading status you know how much you can lose and how much you can make
With this transparency you can trade with ease and in a relaxed mode.
Binary Options Brokers Comparison
How to choose the best Binary Broker?
If you wish to trade binary options you need the services of a binary options broker. Here there are different parameters to look for when finding the right broker. It is not like forex trading that you need to deal with pricing, slippages, requites and other issues. But with binaries you do not have issues with slippages and re-quotes as these have no place in the binary options market.
Following is what you need to consider when choosing a binary options broker
1) Regulation: Check with regulation of brokers as proper regulation ensures that sharp practices by brokers are reduced to the barest minimum. For the binary options market, regulation will ensure that your funds are safe and that you are paid your trading profits accordingly.
2) Customer service: The best broker should have a responsive customer service department. There are some brokers that are do not have a good and reliable customer service that rarely give traders solutions to their problems. It is essential that you choose a broker who can provide live customer chat services, manned by responsive staff who can attend to your requests promptly.
3) Range of Trade Types: There are three major trade types in binary options. But many brokers do not offer the full range of trade types and even place all manner of limitations making it difficult for you to make money in binary options. You need to select brokers that provide transparent trading conditions.
4) Trading Software: Find the broker that provides the best kinds of trading software to make you at ease for trading, easy navigability and user-friendliness. If you have to spend half of your trading time just trying to navigate around the trading platform in an effort to make trades, then you need to change brokers.
5) Payouts: Payouts are varied in the binary options market. Some brokers even provide what is known as “variable” options, which allow a trader to exit a profitable binary options trade even before the expiration date. Some brokers also provide payouts as much as 80% per trade. Find a broker whose conditions make it more favourable for you for payouts.
What are welcome bonuses?
Great Bonuses are also one of the factors that makes trading with binary options exciting and profitable. Trading websites and binary option broker offer various bonuses to attract customers.
Among the various bonuses is the welcome bonus which is for newbie traders. This bonus acts like a compliment from the broker to all the newcomers on its trading website. All you have to do is to make an account and then make a deposit, the minimum amount of the required first deposit value and you will receive the bonus in your e-wallet on the website. Remember that this binary option bonus is measured in % and the final reward amount is calculated according to your first initial deposit.
The welcome bonus is always devoted only to newcomers and once you become a regular customer on the binary option broker, you cannot apply for this bonus again.
Is it possible to get a No Deposit Bonus?
Yes you can get a no deposit bonus. The no deposit bonus is one of the most preferred financial bonuses in general. The situation does not change, when it comes to binary option trading.
The interesting thing about this bonus type is that it incorporates a reward as a compliment from the brokerage company for joining the website. It is usually an amount of money, which is given once you make a registration. This type of binary option bonus does not require, though, from you to make any deposit in order to get and use it.
What is a minimum deposit amount?
Binary Options Brokers have a minimum deposit requirement. It is the amount that you must deposit into your trading account before being able to make live trades. Most brokers provide added services, bonuses and training if you deposit larger amounts into your account. There are also different levels of service provided by brokers depending on the level of minimum deposit requirement. A broker that requires only $50 to open an account may not offer the same services that a broker which requires a $250 minimum.
You should know that the service and bonus you get is based on the deposit you make. This means that you will get better service if you deposit $250 and sometimes no service or bonus if you deposit under $100.
Is Binary Options Trading regulated?
Yes and No is the answer. Yes as most of the Binary Options trading is regulated. Currently, more than twenty binary option brokers are regulated by CySEC (Cyprus Securities and Exchange Commission which is a member of the European Union) . Cyprus is a member of the EU, and the CySEC license is accepted by all EU countries. No CySEC regulated brokers accept binary option traders from the United States.
No- as popular Binary option brokers are but not regulated by the SEC or CFTC in the US. Using a regulated binary options broker is not a guarantee that your funds are secure. CySEC is not the same as the US CFTC, and does not offer investors the same level of protection of their funds.
The best option for a binary options trader is to contact a regulated broker and ask where trading account funds are deposited, and what guarantee, if any, the broker can provide to ensure your money is safe.
Should I use 1 or various Binary Options providers?
You should open accounts with two different regulated binary option brokers. Test out the trading platform, test the withdrawal procedures and ensure that it is easy to make withdrawals.
What is a broker's Maximum Payout Percentage?
Payouts are varied in the binary options market. Some brokers even provide what is known as “variable” options, which allow a trader to exit a profitable binary options trade even before the expiration date. Some brokers also provide payouts as much as 80% per trade. If you can find a broker whose conditions make it more favourable for you to do so, then you need to grab the opportunity with both hands.
Low Purchase Limit vs Variable Purchase Limits
Variable purchase limits brokers give you more flexibility in your trading. These brokers allow you to take advantage of variable trading amounts. If it matches your trading strategy, greater flexibility and variable trading amounts is sure to help you have huge profits. You can also trade on a massive range of assets: shares, gold, oil, currencies.
It’s not uncommon for traders to see high returns of more than 85% on their investments using variable purchases limits brokers.
But if you don’t have a huge bankroll, you can opt for low purchase limit binary options. With low purchase limit brokers, you can start trading for as little as $25 If you are new to Binary options trading then low purchase limit is best for you as a start.
Can I exit an Option prior to the expiration date?
Yes you can exit an option prior to the expiration date. This is a new feature added in the binary options market that allows for the ability to close trades before their expiration times. The function to end an options trade early is referred to as the “option buyback” or the “early closure” closure feature.
Generally, this action is taken in order to capture profits on an “in the money trade” before markets are able to reverse and erase those profits, or to cut losses in a trade that is not expected to work out favourably before the contract expires.
Am I able to make multiple trades on the same asset?
Yes you can make multiple trades on the same asset. As there are variety of assets available for binary option, trading is wider than just about any other trading method Being familiar with an asset give you a fantastic trading advantage.
Can I limit my risk?
Yes you can limit your risk by adopting the following when trading:
You need to decide which options to trade. If you’re new to stocks, shares, commodities and forex make sure you’ve researched each area in full before you think about beginning buying or selling binary options in any one of them.
Choose the best binary options broker and platform Finding a platform that suits you can reduce the risk of a misplaced bet. Check both for how easy it is to navigate and place individual bets.
Choose the best binary options account. You’ll need to pay attention to the minimum initial deposit needed, and its minimum single trade price. The lower each amount is, the lower your immediate risk.
Strategies to limit risk: Never bet more than you have. You should set yourself a total investment figure you’re allowed to bet per day, per week and per month and never exceed it.
Also tie each individual trade to your total investment, as a proportion (e.g. 5%) of that overall budget. Your stake per trade will then shrink in line with your balance if you lose out, minimising risk; alternatively it grows when your trades enjoy some success, thus maximising your profits.
Also binary options to hedge against your own equity shares; for example, betting that a company’s share price will fall during periods of uncertainty. In effect this would offset any losses if your shares’ value were to fall.
Thus when trading with Binary Options you will find it fast and exciting with lots to offer as profits. All you need is get as much practice as possible and do thorough research to start trading.
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