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Tradingcritique.com describes binary options as the simplest online trading method, where the investors speculate on the future price of the assets will go up or down. Binary Options is most preferred by the investors as it yields a high profit in less time. The short-term trading in Binary Options can be as low as 60 seconds up to 30minutes whereas long-term trading extends till a month. For a successful trade, maximum of 90% of the invested money is given as Payout. This feature makes the investor’s trade hassle-free.
The investors of the Binary Options profits from the price fluctuations in global markets. The Trader yields profit by correctly predicting whether the asset price moves up or down in the prescribed time. As the Binary trading has two options either up or down a prediction for a trade, it is named as ‘Binary’. The trading instruments or the assets on which the Binary trading can take place are stocks, indices, commodities, foreign exchange, etc.
Binary Options can be dated back to 1971 when the Chicago Board of Options Exchange (CBOE) first structured the Binary Options platform. It regulated the Binary Options through different frameworks to improve the quality of Binary trading and expand it to more investors. The Options Clearing Corporation (OCC) was created to regularise the practice of Binary trading and oversee any malpractices. This gained more investors to Binary trading. In 2007, OCC proposed to accept the Binary Options as a financial asset that can be traded on its own in major exchanges. In 2008, the U.S. Security Exchange Commission approved the Binary Option as the tradable asset in the international financial markets. In May 2008, American Stock Exchange was the first international exchange to offer Binary trading in the name of Fixed Returns Option publicly.
A month later CBOE authorised Binary option in its exchange. At the starting, in the Binary Options, only ‘Call’ option was available. The improvements made in it later popularised the Binary Options rapidly among the investors. In 2008, the investors can access the Binary Options platform from their desktops, but in late 2013, the traders can use the mobile devices to access the Binary Options. The Binary Options expanded worldwide from North America to Asia, which made it convenient to trade in Binary Options platforms for 24 hours and trading can be executed in various financial assets. The search in google each month on the term ‘Binary Options’ is the same as that of the Forex trading. Now there are various online Binary trading platforms available with various features to support the customers.
Forex trading is a vast trading market. Enormous numbers of customers around the globe are engaged in forex trading daily. If you are a beginner or experienced trader you will be finding it difficult to select the best forex broker or best profitable system to trade in forex. Here tradingcritique.com helps you to learn the basics to choose the best broker from the vast on your choice.
In this introduction, tradingcritique.com helps you to know the forex trading tips and strategies applicable to forex trading or currency exchange.
The following features should be understood clearly before trading in Binary Options.
Expiry Time – The time period from which the Binary trade begins to the final time period when the trade ends is referred to as Expiry time. It’s essential to select the Expiry time to start the trade. The Expiry time is often decided by the traders and it can vary from 60 seconds to 12months. The traders widely choose short term Options where the trade contract ends within 5minutes. The Expiry time can be ended at any point and the profits are calculated accordingly to that time period of the trade. The Expiry time can be divided into three categories:
Strike Price – Strike price is the value of the trading instrument at the time of starting the trade. It differs for every asset according to the market trends. The Strike price can be as minimum as $5 – $25 and the maximum range can be from $1000 to $20000. The Binary trade is exercising the ‘Call’ or ‘Put’ Options on the Strike price.
Call and Put Options – When the investor predicts that the Strike price will rise within the Expiry time, selecting the ‘Call’ Option makes the trade successful. When it’s predicted that the Strike price will fall within the Expiry time, then the ‘Put’ Option should be exercised for a successful trade. On correctly placing the bid as ‘Call or Put’ for the Striking price the investor will get the Payout offer. Call/Put is also known as High/Low Options and Up/Down Options.
Buy and Sell – For exercising the ‘Call or Put’ Options, the Binary Options should be bought through investing a particular value.
This process is called the ‘Buy’ and the amount invested is called the ‘Bid’. The Bid for a Binary trade can be as low as $1 – $5. On a successful Binary trade, the investor gets back the Bid invested along with the Payout offer. This is a special feature of the Binary Options where you can invest and profit from even $1. The minimum Bidding amount can range from $1 – $25 and a maximum can range from $1000 up to $20000. The maximum and the minimum Bid amount depends on which Broker platform is used for Binary trading.
During the Expiry time of the trade, if the investor predicts that the ‘Call or Put’ Option exercised is wrong, ‘Sell’ Options can be used to end that Binary Options. The Sell Option can be exercised in the ‘Offer’ price mentioned for that specific trade. The Bid and Offer prices fluctuate during the Expiry time. The trade can be closed before the Expiry time to lock the profit or reduce the loss of an unsuccessful trade.
Payout Offer – The profit you get out of investing in Binary Options is termed as Payout offer. This Payout offer is usually given in Percentage for the Bid price exercised. The Payout percentage for a successful trade will be notified before the investor starts a trade. At the end of the Expiry time, with a successful trade, the investor gets the Bid price + Payout offer as the return. The Payout offer differs for every trading instrument. The Payout percentage differs according to the broker platform in which the Binary trading is exercised. There are broker platforms which give Payout offer as low as 12% and the highest Payout offer can go up to 500%. Revenue Option has a set of legal broker platforms where you can get the highest Payout offers and we guide you to select the broker platform according to your investments to get higher Payout percentage in return.
There are many legal regulatory bodies in various countries to regulate the Brokers of Binary Options. These regulators take care of the proper and legalised trading of Binary Options and give protection to the investors.
The major regulatory bodies that have a high impact on Binary trading platforms are,
Advantages
Disadvantages
The most commonly used trading pattern in Binary Options is ‘Call /Put or Up/Down or High/Low’ pattern. Other trading patterns followed in Binary Options are
In Binary Options most of the trading instruments can be traded including Currency, Stocks, Indices and Commodities. The type of Assets for trading in Binary Options depends on each Broker platform and most of the time the Asset lists are available in the Broker website. Mostly 25 to 100 popular stocks will be available for trading in all the Broker platforms. Some examples are major forex pairs such as EUR/USD, USD/JPY, GBP/USD; stock indices like FTSE, S&P 500, Daw Jones Industrial, Nikkei 225 and commodities including Gold, Silver, Oil, etc.
Binary Options trading is quite a Risky one while comparing to other platforms. It is most risky because there are several brokers unregulated who try to take advantage of the customers. As this Binary Options trading is based on the prediction it is more similar to gamble.
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