I am experienced in trading stocks and forex. I am exploring techniques to have sustainable returns on Binary Options and in the long run.
Introduction to Binary Options
How do I make money off this? This is the first and probably most important question most people would ask. Binary options are basically a form of financial derivative. You purchase an option to buy/sell an underlying asset (e.g. gold, foreign currency or commodity) at a specific price and date. If the price to purchase of the underlying asset is higher than price to buy it in your option, then your option has value and you can sell it for money.
Crash Course in Trading Binary Options
There are many variations in trading binary options and there are a few to choose from when you decide to trade. It would be the best if you understood every type so you are better equipped to make investment decisions. Without the required knowledge about binary options, it devolves into simple gambling with a lower than 50 percent chance of success. The following information is the basic knowledge you need to better equip yourself to be successful in trading binary options.
High Low/Call Put
The simplest to understand is the “High Low/Call Put”. As an investor, you only need to predict whether the price of the asset is going to rise or fall within a given time. The investor then selects Call if the prediction is a rise in price and Put if it is a fall in price.
In this type of option, the investor will have to forecast if the price of the asset will touch a specific value before the end of the given time.
This works in pretty much the same way as High Low/Call put option does, but in this case, you select a price that the asset must not reach before the selected period.
30/60 second trading
This is an option to trading binary options within that short time frame. I do not recommend using these options as no amount of knowledge will help you leverage the chance of making a successful forecast.
There are a few more variations in trading in binary options but these are the basics and the easiest to understand. I would recommend that you do additional research regarding the topic before moving on to the complicated types of binary option trading.
Where Can I Trade Binary Options?
Binary options, like many other financial derivatives, are traded in the stock market and handled by brokerage firms. In this article, I will be discussing and reviewing some of the better known binary trading platforms to inform you on the ones you should choose to make the most amount of profit. The following binary trading platforms are the most well-known and reputable platforms for binary option trading.
It is short for the Northern American Derivatives Exchange, formerly known as HedgeStreet, and was founded in 2004. It is a US-based retail-focused online binary options exchange. It is regulated by the Commodity Futures Trading Commission and as of writing this, it is the only legally operating US CFTC approved binary options broker. They don’t offer monetary bonuses because it’s against CFTC regulation but it had one of the fastest withdrawal times; they offer free transactions for first time deposits and have a good selection of assets. The minimum deposit is $100 and they also offer a free account with $25,000 virtual currency to try out their platform before investing.
This is a UK-based company providing trading in financial derivatives such as contracts for difference and financial spread betting and, as of 2014, stockbroking to retail traders. The majority of its activities are centered in the UK but they have begun to expand internationally. It is listed in the London Stock Exchange. They have over 152,600 clients internationally and trade in over 10,000 markets. They offer a cash incentive when you sign up as long as you make the required deposit. IG has been in operation for over 40 years and IG Group, IG Index, and IG Markets are regulated by the United Kingdom’s Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC) in Australia, as well as the Monetary Authority of Singapore (MAS). The minimum deposit is $200 and withdrawal only cost 0.3%. They also provide a demo account to try out their platform.
IQ Option is operated by IQ Option Europe LTD. It’s located at Silver House Business Centre, 19 Spyros Kyprianou Avenue, 3070 Limassol, Cyprus. It is regulated by the Cyprus Securities and Exchange Commission (CySEC). It’s a transparent brokerage, highly functional and innovative education platform. It one of the only sites that don’t feel like it was cut from the same mold as other binary option trading platforms. It offers the lowest minimum deposit of $10 and its proprietary platform offers a multitude of tools not adequately offered in other platforms like moving averages, Bollinger Bands, MACD, and RSI. They also provide 60% return for out of the money (OTM) options for VIP accounts. It has a smaller asset list compared to other platforms but provides adequate listings for indices and Forex. They have no minimum amount for withdrawals but the delay is three days for normal members but one day for VIPs. They also have a demo account.
The company’s name is Advanced Binary Technologies Ltd. Founded in 2014, it currently operates unregulated but has built transparency as part of their business model. It has been experiencing steady increase of traffic on their site. Ayrex focuses on a faster system of trading, making you feel in trade as soon as their site loads up. It has over 70 assets to choose from, requires a 50 dollar minimum deposit and provides up to a 30% bonus for initial deposits with T&C. The only downsides are the lack of education materials they provide in their sites and that US customers are not allowed on their site. They offer a demo account.
AnyOption is one of the true pioneers of the binary options industry. AnyOption is owned by Ouroboros Derivatives Trading Ltd. It was launched late 2008 and is regulated by the CySec. They offer over 100+ assets. Their minimum deposit is $200. They are one of the oldest operating binary option trading platforms and have steady stream of web traffic on their site. They have healthy set of tools to help you in your binary option trading and they offer small refunds, which is good news for beginners. They also provide bonuses but are given on a case to case basis. They don’t offer demo accounts and US customers are not allowed.
Any of the sites reviewed here are a viable way to start trading binary options. But if I had to recommend one to a beginner, it would be NADEX for US customers and IQ Options for everyone else. This is because out of the five they give the best level of education and give the lowest barriers to entry. Aside from this, they have a proven record of excellence and transparency. In anything involving money, it is best that you get the safest and most secure platforms. Both sites provide a demo account which you can learn and use to gain confidence before you start trading the real thing. IQ options also gives refunds to OTM trades you might have made (assuming you opt for their VIP account), providing you a little bit of a buffer for your learning curve. In summary, binary options are not a sure thing and there are a lot of sites which operate in an unethical manner. It's best you pick a platform that is regulated and verified to payout withdrawals in a safe and timely manner.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.