Perfect For Beginners!
Free Demo Account!
Free Trading Education!
A Guide to Trading Binary Options in the U.S.
Binary options are financial options that come with one of two payoff options: a fixed amount or nothing at all. That’s why they’re called binary options—because there is no other settlement possible. The premise behind a binary option is a simple yes or no proposition: Will an underlying asset be above a certain price at a certain time?
Traders place trades based on whether they believe the answer is yes or no, making it one of the simplest financial assets to trade. This simplicity has resulted in broad appeal among traders and newcomers to the financial markets. As simple as it may seem, traders should fully understand how binary options work, what markets and time frames they can trade with binary options, advantages, and disadvantages of these products, and which companies are legally authorized to provide binary options to U.S. residents.
Binary options traded outside the U.S. are typically structured differently than binaries available on U.S. exchanges. When considering speculating or hedging, binary options are an alternative—but only if the trader fully understands the two potential outcomes of these exotic options.
Now that you know some of the basics, read on to find out more about binary options, how they operate, and how you can trade them in the United States.
U.S. Binary Options Explained
Binary options provide a way to trade markets with capped risk and capped profit potential, based on a yes or no proposition.
Let’s take the following question as an example: Will the price of gold be above $1,250 at 1:30 p.m. today?
If you believe it will be, you buy the binary option. If you think gold will be below $1,250 at 1:30 p.m., then you sell this binary option. The price of a binary option is always between $0 and $100, and just like other financial markets, there is a bid and ask price.
The above binary may be trading at $42.50 (bid) and $44.50 (offer) at 1 p.m. If you buy the binary option right then, you will pay $44.50. If you decide to sell right then, you’ll sell at $42.50.
Let’s assume you decide to buy at $44.50. If at 1:30 p.m. the price of gold is above $1,250, your option expires and it becomes worth $100. You make a profit of $100—$44.50 = $55.50 (minus fees). This is called being in the money. But if the price of gold is below $1,250 at 1:30 p.m., the option expires at $0. Therefore you lose the $44.50 invested. This called out of the money.
The bid and offer fluctuate until the option expires. You can close your position at any time before expiry to lock in a profit or a reduce a loss, compared to letting it expire out of the money.
A Zero-Sum Game
Eventually, every option settles at $100 or $0—$100 if the binary option proposition is true and $0 if it turns out to be false. Thus, each binary option has a total value potential of $100, and it is a zero-sum game—what you make, someone else loses, and what you lose, someone else makes.
Each trader must put up the capital for their side of the trade. In the examples above, you purchased an option at $44.50, and someone sold you that option. Your maximum risk is $44.50 if the option settles at $0, and so the trade costs you $44.50. The person who sold to you has a maximum risk of $55.50 if the option settles at $100—$100 – $44.50 = $55.50.
Perfect For Beginners!
Free Demo Account!
Free Trading Education!
A trader may purchase multiple contracts if desired. Here’s another example:
- NASDAQ US Tech 100 index > $3,784 (11 a.m.).
The current bid and offer are $74.00 and $80.00, respectively. If you think the index will be above $3,784 at 11 a.m., you buy the binary option at $80, or place a bid at a lower price and hope someone sells to you at that price. If you think the index will be below $3,784 at that time, you sell at $74.00, or place an offer above that price and hope someone buys it from you.
You decide to sell at $74.00, believing the index is going to fall below $3,784 (called the strike price) by 11 a.m. And if you really like the trade, you can sell (or buy) multiple contracts.
Figure 1 shows a trade to sell five contracts (size) at $74.00. The Nadex platform automatically calculates your maximum loss and gain when you create an order, called a ticket.
Nadex Trade Ticket with Max Profit and Max Loss (Figure 1)
Binary Options India – Beginners Guide to Options Trading in 2020
Over the last 5 years, Binary Options have only grown more and more as a popular form of investment in the whole world, including India. Due to the fact that it is an easier form of online trading to get into and because you often need less capital or qualifications compared to Forex trading for example, many beginners have made their way from beginner to expert traders.
Binary options trading is however a typical “easy to learn, hard to master” kind of thing, so if you are new to this world, we suggest that you do these three things:
- Go through this article and discover the basics of options trading.
- Then head over to the Tutorial section where we explain the basic concept on how you can be a profitable trader in the long run.
- Once you have the basics, check out our free Trading Academy where we show you some very successful “over the shoulder” strategies that we still use to make profits – and that you can start copying immediately, too.
Are you ready? So let’s get started.
Do you know already how options trading works and are you just looking for the best broker? Click here and read our review about our #1 broker choice.
What Are Binary Options?
Binary options are by far one of the simplest forms of online investment, a way of betting on the outcome of an event of an asset. You stake an investment on your prediction on whether the price of an asset will go up or down within a certain time period.
If an investor is successful with his prediction, he receives a fixed profit return between 80-100%.
Here is a quick video explanation:
The assets traded are generally the same as the traditional stock market, the only difference is that Binary Options Traders do not actually buy and sell shares. They invest only in the perspective valuation or devaluation of an asset – so basically, if the price of the asset will go up or down.
If the outcome of the asset is different than predicted, the investor loses the amount invested. Investing in Binary Options without an investment strategy is foolish. This is important to remember that because of how easy and simple it is to invest, it can easily become a form of gambling.
This is why we have created this guide and this is why we suggest you to go through our tutorial and the free Trading Academy before you invest any money so we can help you to become a smart trader, not a risky gambler who just randomly place bets.
Let’s see a trading example
Let us look at a simple Binary Options Trade, step by step so you can understand what we are talking about here.
Example: (Made up numbers)
- You have been watching the market and decided that you want to make a trade. You have decided to make a prediction on the price of Gold.
- Currently, the Gold index is trading at $1000. After using your analytical tools and education (which you will gain in our academy), you have predicted that in the next 1 hour, Gold will be trading at a value higher than $1000.
- You then invest $100 in a “Call option”, which is basically a bet that expects a higher price than the current $1000.
- After locking in your Call option you then wait 1 hour.
If after that 1 hour, Gold is trading at anything above $1000, you will earn up to 80-100%, depending on the broker, of your investment back on top of your original investment. So basically, in case of a successful trade, you almost doubled your money.
If you were wrong however, you lose your investment. Now we hope that you see already why binary options trading is often called a “high risk, high profit” investment and it is true.
However we want to stress out again that a smart trader follows specific strategies and rules and not just blindly place bets which enables them eventually to be profitable in the long run.
A few things to note:
- Brokers usually offer expiration periods that range from minutes all the way up to months.
- The profit value depends on your broker, average payouts are 80-90% depending on your broker and your account level with them. In rare cases, you can get even 100% profit rate on your investment.
- Remember the amount that the index increases by is irrelevant as you do not own the stock, you are simply betting on the outcome.
So even if the price of Gold went up just by $1, you still get your 80-100% profit.
I hope you guys have learned how simple it is to make your first trade.
Did you know? Most trustworthy brokers are offering a free, unlimited demo account, so you can try online trading in just 2 minutes, without any risk.
Are Binary Options Safe?
Binary options are a form of legal investment, with millions of investors and strictly regulated broker firms operating across the globe.
So from a legal perspective, if you choose a popular, internationally regulated broker– which you can find under our “Broker” section – your money should be safe.
Due to the simplicity of it however, it is very important that investors use tools and analysis, along with a strong education to make their predictions.
The industry gets a bad name because so many beginner traders are simply betting their investment money away, with no education at all. Then they go on to moan about how options trading is a scam.
Binary options trading is an amazing opportunity to make good profit and income. However, it takes time and patience to educate yourself, this is not a get rich quick scheme! You may lose money with some trades and it may take several weeks to get to a position you are earning good money – and you have to accept this fact.
Do not get disheartened by losses, as long as you are learning and applying a strategy, you will learn from every mistake and if you are using a good strategy, the wins quickly outweigh the losses.
Fraudulent Brokers and Scams: Signals, Robots, Autotrading
Another reason the Binary Options trading market gets a bad name is due to the large amount of fraudulent brokers and scam tools like most robots and signal services. Check our full list of binary option scams here.
If you are a beginner or even an advanced-expert trader, we highly suggest you to choose regulated brokers only and stay away from one-click tools that offer easy money overnight.
We have simplified your choice by testing most of the available brokers out there, so check out our “Brokers” menu for our top suggestions. If you chose one of these brokers, we can almost guarantee that you will get amazing customer service, great trading experience and last but not least: investment protection up to €20.000 in most cases.
Binary Options Trading In India
India has gone through massive economic growth in previous years, because of this binary options trading has grown exponentially in popularity. Many residents see online trading as a great way to earn an income part-time, with many even quitting their jobs to trade full time. With advancements in smartphones and brokers bringing platforms to the population of growing smartphone users, this kind of trading becoming more and more accessible.
Indian assets are becoming more available across a wide range of brokers, so we believe that the online trading industry has entered India, and it is here to stay.
Here are a few quick guides to some of the unique factors you need to look at as an Indian trader.
Regulation and Licensing – Is binary options trading allowed/legal in India?
The legality of Binary Options Trading in India is complex and is debated often, but let us be clear here: It is not illegal in India to trade on the Binary Options market.
The reason there is so much confusion and hearsay around the topic is the fact that it isn’t regulated in India just yet by the Reserve Bank of India. The difference between the brokers who are regulated and the brokers who are not regulated is vast.
For now, it seems the best option for Indians to trade online is to choose an offshore broker with strong a regulation accreditation. Look for regulations such as FinaCom (International Financial Commission), or if you are looking at European brokers, look for CySEC, FCA or MiFID licensing.
All of these accreditation means that you are protected up to 20,000 euros per trade if the broker does something unlawful.
Customer Support and Hindi language
We will go into much more detail later in this guide about customer support in general. As an Indian trader, not only do you need to make sure that the customer support of your broker is excellent, you also need to make sure that you will not face a language barrier problem during exchanges.
The perfect broker for you will not only offer excellent customer support, they will also be able to converse quickly and efficiently in your native language. Obviously, every trading broker speaks English, but fortunately, Hindi language within the customer support is getting more and more popular among leading brokers.
Taxation in India – do you have to pay income tax after trading?
Generally, any income from trading will be considered a non-speculative business income in India, so yes, you have to pay taxes after your binary option profits.
If you are earning and making profits from trading, then you are expected to follow the tax rules of your country and declare it. Declaration is your decision, but we highly recommend following your government’s procedures to avoid any future issues, especially when you become a very profitable trader who is making a nice income.
Your profits will be added to your yearly income, and depending on your tax bracket, you will pay tax accordingly.
You can, however, claim this as business income, so you are allowed to offset it against any expenses your business incurs. You can offset against advisers, the cost of software, internet bills, etc. You can also offset non-speculative losses against your non-salary income.
Important Terminology in Options Trading
If you have ever watched films, or seen an actual market floor, you may have gotten overwhelmed by the terminology and jargon flying around. We are aiming to simplify that, that way you enter the world of investment confidently.
To start basic trading, you don’t really need to know what each of the below words mean, but if you want to understand strategies and use tools (which we highly recommend), it is important to your long term goals that you know what all this terminology means, even if it’s difficult to understand what they exactly cover.
But do not worry, over time, this terminology will become part of your everyday vocabulary.
- Asset – this is the underlying stock, commodity, currency pair or index, on which the trading activity is based
- Expiration time – the date and time when the option is about to expire. This is the time when you your option is closed and you either made a profit or not.
- High or Call option: by choosing a Call option, you speculate that the asset’s price will rise.
- Low or Put option: by choosing a Put option, you speculate that the asset’s price will fall.
- In-the-money – this term is used in order to describe the situation when you have predicted the movement of the asset price correctly and the binary option is profitable.
- Out-of-the-money – this term describes the situation when you have wrongfully predicted the asset’s price movement, rendering the binary option a loser.
What are the available option types?
Now we have glossed over the basics, let us look into Binary Options in more detail.
The term “Binary” is used because there are only two results, either the price will go up or the price will go down. You win or lose based on these results.
There are several varieties of Binary Options.
Put or Call options
The simplest binary option form is called the Put or Call option.
The PUT option is a prediction that the price of the given asset will DECLINE over the period stated.
The CALL option is a prediction that the price of the given asset will RISE over the period stated.
These are the simplest form of binary options, and for the first stage of your trader career, we suggest sticking to these options.
When you advance to a better level of knowledge and experience wise you can experiment with different types, such as the following:
There are two types of touch options.
The one-touch option gives investors an advantage when they are confident that the asset will move according to their prediction.
They will set a one-touch option at a “trigger point”, during a period of time.
During this period of time, if the price of their asset reaches this trigger at least once, the investor will receive a payout, regardless of where the asset finishes.
Let us give an example.
The Gold exchange price is $ 1000, you decide that within the next week, Gold will reach $1250 at least once.
During that next week, the price of Gold reaches $1340, before dropping back to $980.
You receive your payout upon the trigger point being met so you are paid out.
This option is the opposite of One Touch Option. The no-touch option predicts that the value of the asset you are aiming for will not reach a certain value limit. Like One Touch Option, you or your broker set a certain price for the target asset and predict the price of the asset will not touch the price you or your broker set in a certain time period.
Double Touch Option
Double One Touch option
By taking the concept of the one-touch option, the double touch option has two trigger point values. Your option will benefit if the value of your assets touches one of the triggers that you set, regardless of which point.
For example, if the current price of gold is $ 1200, and you or your broker set the trigger’s top point at $ 1250 and the trigger’s bottom point at $ 1150, your option will be profitable if the gold price rises to $ 1250 or drops to $ 1150. Conversely, if the price of gold does not touch one of the trigger points within a certain time period, it will be out-of-the-money.
Double No Touch option
As the name suggests, the double no-touch option has the opposite direction from double one touch. You still have two trigger values but this option must be in-the-money form. It is predicted that the asset will not touch one of the two trigger points you have set for a certain period of time.
If one of the trigger points is touched by the price of your option transaction it becomes out-of-the-money and you lose your investment in assets. Therefore, traders usually prefer to invest in markets with a tight range that usually appears after the climax of selling or buying (strong price spikes).
Paired options are one of the more exotic forms of binary options. This option is only given by a very few brokers and is usually based on the performance of an asset which is related to other assets.
Here, the trader selects the asset pair from the list that has been given and bet on which asset will surpass the other within a certain time. Assets are paired by class and sector (the categories must be the same).
Although some of these options sound very interesting, we highly recommend that you stick with the basic call and put options.
For two reasons:
- Regulated brokers usually don’t offer exotic option types.
- Due to their nature, they make trading very risky. It’s a big challenge already to hit the right direction of the price movement, why would you take extra risks?
What Assets Are Used In Binary Trading?
As you become more knowledgeable, you will probably begin to prefer to trade certain assets. This is a beginner’s guide so we will not go into this in too much detail here. Range of assets can be an important judging factor when reaching a more experienced level, but for beginner traders it’s not necessarily the #1 aspect you should look after.
However, I am sure you have all seen on the news, stories about stock prices from big companies like Microsoft or Toyota. Stories about massive increased or gradual decreases in the value of stock. These are the main types of Assets you will encounter in the Binary Trading World.
On the stock index, you have to predict the value of the top shares of a stock market whether it will increase or decrease in a certain period of time.
You can trade on any stock index, be it Dow Jones, FTSE 100, Hang Seng, DAX, and NASDAQ. The advantage of playing a stock index is that the procedure is easier than buying shares through a broker, in binary options you don’t have to pay any fees or commissions.
You also do not need any fancy accreditation, or to work in the horrible environment that is the stock market.
Let the stock market traders get up early and go to work for 18 hours a day in their hot suits, whilst you get up at noon and make trades whilst sat in bed!
Currency pairs and Forex
Trading with currency and foreign exchange options is very closely related to paired options, because you can only define a price of a currency relative to another one.
Popular currency pairs are EUR/USD, USD/JPY, USD/GBP, USD/CHF, USD/CAD, AUD/USD, NZD/USD, etc
In addition, the binary options offer exchange for bitcoin with other currencies, such as bitcoin with US dollars.
Cryptocurrency and Bitcoin
This brings us onto Cryptocurrency. A currency that deserves its own paragraph due to the complexity of it.
Crypto is one of the most exciting and explosive markets we have seen since the .com era. Overnight rises of up to 1500% are not just happening, they are happening often.
A very dangerous commodity with the potential to earn a fortune or destroy. You rarely can apply normal investor strategy or analysis to Crypto, so be wary of dipping your toe into this world.
If you are interested in trading with Bitcoin, Ethereum, etc. check out our guide about Cryptocurrency Trading.
In commodity trading goods allow you to trade without having to buy these commodities physically, which of course must be very expensive. Typically, commodities traded through binary options trading are the value of gold, silver, copper and crude oil.
Previously, the sale and purchase of shares was generally only carried out by high-ranking business people who at least had a bachelor’s degree in economics or equivalent. For beginners, buying and selling shares is quite risky to do.
With binary options, even you beginners can trade up to thousands of shares without having to buy real shares from a company where you invest.
How To Start Trading Binary Options?
Even for beginners, getting into this world is very easy. With the right knowledge and guidance, you should be up and running in no time. Make sure you keep up to date with news and reviews here in order to get the most up to date information on trust-worthy brokers.
4 Steps to start trading with binary options:
- First, look for the best broker – check out for our recommendations in the “Brokers” menu.
- When you have found your broker make sure you register a Demo Account. Use this demo account to test how good the platform is for you, test the comfort and smoothness of the platform out.
- When you are comfortable with a platform depositing funds into your account. Check out our article if you need help with it.
- Sign up for our FREE Trading Academy and learn what strategies we use to be profitable while trading.
How To Choose the best Binary Options Broker?
Choosing a binary option broker is crucial for your long term investment goals. This is your hard-earned investment money here, choosing the wrong broker means you could lose the value of your investment.
We understand this, so we are going to give you a quick guide to use when investigating potential Brokers. We use a more in-depth analysis when writing our broker reviews, but the below information will give you a very good idea about what to look for.
First Impressions/General Information
When looking for a broker, first impressions are often a great indicator of whether to continue looking into a broker.
There should be clear transparent information about the company’s objectives and past achievements as well as statistics and general information about the company.
Look for trust signals such as physical company locations, details on leading members of staff, up to date news of current positions.
If learning material is publicly available and access to a demo account is free, take your time to see the quality. Compare the content of existing learning material with other material provided by competitors.
Regulations and Safety
A regulatory body, such as CySEC or the Financial Commission are 100% crucial when picking a Broker. Look for similar accreditations like the one from Olymp Trade below:
If no one is regulating a broker, they are free to do what they want, this is how most people have been scammed in the past.
The purpose of regulation consists of things such as consumer protection and strict adherence to the financial market model, as well as convincing and promoting fair competition among companies with fair rules so that consumers can exercise their rights fairly.
For binary options brokers to be regulated, they must meet the requirements and operate in accordance with the regulations set by the regulator. Among these requirements are security protocols and procedures to fight money laundering and fraud.
If a broker is regulated by FinaCom or CySEC, your trades are protected up to a value of 20,000 Euros.
Because of these regulation, we have to stress out:
Never give fake data. You will lose your money and will have no right to contest.
Please Read That Again.
Free Demo account
Every broker who is worth their salt will have some form of a demo account available to its users.
When looking for a Broker, we would not recommend going with a broker who does not have this kind of feature available.
Demo accounts allow you to test-run a platform, checking that it works for you, runs smoothly and remains stable for long periods of time and makes sure you like the style and tools available.
Use demo accounts wisely to check how well your strategies are doing, test new strategies, learn how to use different metric measurements, indicators, and chart types.
Platforms that work well no matter what your account level is, usually work out better for users in the long run.
Most good brokers will allow you to keep a demo account alongside your regular account, allowing you to test and practice without investing your capital every time.
Wide selection of Deposit and Withdrawal Options
Make sure you thoroughly read through all the terms, conditions and stipulations around a Broker’s deposit and withdrawal system.
Make sure you find out the policy for withdrawals and the time scales. Some brokers only allow withdrawals to the same method you used to deposit.
Make sure you check what the method is also, will you use international bank transfers? Or an electronic wallet such as Skrill or Paypal.
The general consensus we have found for users in India is that Skrill is currently the best way of transferring and withdrawing money. You can read our full Skrill review here.
Please note: Due to policies to prevent money laundering and fraud, you may be asked to send and confirm documents at the time of initial withdrawal, which can be time-consuming during the initial withdrawal process.
Additional Features: VIP account, indicators, tournaments
Now you should have narrowed your choices down to Brokers that have good money policies and are highly regulated and safe.
The next step would be to choose the platform you like the best. Many platforms are very similar in the Binary Options market, so if you find one with a particular feature that you like, that other brokers don’t have then this may influence your decision.
These features could include:
- Learning material: What topics and strategies can be learned from the material the broker provides for free to its members.
- Tournaments: Almost all of the good brokers have some kind of trading tournaments where you can win nice prize pools by competing other traders.
- Analysis and projection tools: Some platforms provide analysis and predictions for multiple assets. This feature provides a better understanding of scenarios and therefore increases the chances of success even further, increasing investor return on investment (ROI)
- Main Graph Quality: The main graph shows investors the most information regarding a potential investment. Although it looks simple, this is very important, when faced with investment, the ability to clearly visualize the situation helps in identifying trends. Most existing strategies are based on the interpretation of scenarios based on graphics and special tools, this feature should be maximized in its use.
- VIP Account Manager: This is a very specific type of customer service. Many brokers offer their VIP Accounts, Private account managers. These account managers act as dedicated customer service agents to individual traders, allowing for much quicker customer service queries.
- Personal consultant: Personal consultants can give you valuable tips about investing to maximize your level of profit. This feature is again usually available for users with high deposit volumes and VIP Accounts.
Hopefully, if you use the above guidelines, you will be able to choose a broker that will help you prosper and grow as a trader.
We cannot highly recommend to check out our #1 broker recommendation, as this is the one we use the most ourselves to trade, you will be in good hands.
Our recommended brokers score highly in every one of the above factors, they have very high regulation status, have won countless awards, and also have one of the most feature-rich and innovative platforms we have seen out of any currently available brokers.
How Do You Make Money With Options Trading?
You have found out about the potential to make good money with Options trading and you want to know-how. This is probably the main reason you are reading this article.
As we mentioned earlier, options trading looks very simple for the first sight, but it’s somewhat more complex than you might think. Because of this, we have dedicated a whole “Tutorial” section, the article you are currently reading is just the first part of it that is covering all the basics you have to know.
If you already know how to register a new broker account you can skip that article and jump straight to the “How to make money with online trading in theory” article.
Things To Remember!
- Risk is constant throughout all trades, but you will never lose more than you put into a trade.
- There is no need for stop losses in Binary Options Trading, you win or lose.
- Returns are on average 70%-90% per trade, sometimes even 100%
- Make use of Demo Accounts, Free Education and our Free Trading Academy, to give yourself the best possible start.
- Make sure your brokers are REGULATED
And most importantly: Using a good strategy and discipline is the key. Read our next article about how you can make money with online trading (link above), check out our FREE Trading Academy and start your online trading journey now!
Binary Options FAQ
How Much Money Should I Invest?
As with all investments, only ever invest what you can afford to lose. Obviously the more you invest the more profit you will make per trade. With $10 it is going to take you a long time to see sizable profits. But you can still learn a lot from trading at this level.
Investing around $100 is a good entry point for the average user, you can make some decent If you have the capital investing $1000 or more will provide the best benefits, you will gain VIP Status with most brokers, and gain access to all areas of the brokers’ platforms. You will gain more education and specialized tools, as well as dedicated broker support and account managers.
At the end of the day, you have to decide how much you want to invest, no amount is the wrong amount.
If Binary Options Are Profitable, Why isn’t everyone doing it?
80% of people who sign up for Binary Options brokers end up gambling their investment money with little thought or education.
Even though Binary Options can be very profitable, you aren’t going to see massive returns off $10, you won’t make thousands of such a small deposit, this can put off potential investors that are scared to deposit larger sums and just want to get rich quick.
How Much Profit Can I Make?
This depends on deposit size, trading activity, payout, commitment to self-education. It is impossible to tell how much profit you are going to make, however, we use strategies that work with around 75-80% accuracy when we trade. If you are interested in those strategies, sign up to the free academy where we will be revealing our methods.
Can I Try Binary Options For Free?
Yes, all of our recommended brokers have free demos you can try.
We encourage you to do so and spend a good amount of time on the demo before opening a real account with your hard-earned money. It does not matter how good the broker is if you don’t like or understand the platform they use.
Try your usual strategies, try new strategies, fiddle with all the possible settings. After doing that over several brokers, choose the one that felt right to you.
How Do I Withdraw My Winnings?
Please read our section on withdrawals in the article.
When Is The Best Time To trade binary options?
A crucial advanced part of your education will be the utilization of economic calendars.
Economic calendars list the times and days, when each country releases the latest data they have to the public. Certain brokers have better economic calendars then others.
Good brokers have “Data Release Days” with many of them offering bonuses for traders trading on that day.
This can be an absolutely brilliant way of increasing your profits on a day where you will have access to all the newest information.
Open a Free $10.000 Demo Account at our #1 Broker, Olymp Trade:
Binary Options Regulation
By Markus Silvester – October 23, 2020 8:35 am
Binary Options trading industry is quite appealing for traders. The trades are fast and easy to understand, there is a possibility of using auto trading software and mobile apps are enabling traders to trade anytime and anywhere. Unfortunately, we at the Fair Binary Options must warn readers that not all brokers are fair, and that there are some who are prone to scam behaviour. This makes it hard even for experienced traders in binary options to differentiate good brokers from those who are prone to malpractice.
Binary options trading is still not defined by law in some countries, but there are some regulating bodies that can help traders make right decisions when it comes to finding the right broker. Despite the regulation of some brokers and protection such regulation gives, there are still some traders who prefer to trade with unregulated brokers. Regulated brokers do not accept US customers, and traders from the USA have to opt for the unregulated brokers, even if it means that they will engage in higher risk unless they inform themselves before depositing. Only tested brokers on FBO list!
On the other hand, traders from all around the world can find a reputable broker that is regulated without much trouble. Even though, regulation is not a guarantee that a broker is not a scam, it is obviously much harder to be deceived if a broker has some rules and laws to obey. FBO has dedicated their work to uncovering bad brokers and helping traders, so sometimes we blacklist scam brokers even before the regulatory bodies revoke their authorization. However, regulators serve a purpose and make our work easier. Here you will find most renowned binary options regulatory bodies.
Binary Options Regulation EU
Cyprus Securities and Exchange Commission (CySEC) is probably the best known regulatory body in the world of binary options as it also part of the European MiFID (Markets in Financial Instruments Directive). According to Cyprus Securities and Exchange Law, Commission is obligated to supervise, observe, control and act as a competent authority, which means that all brokers who want to be registered must pass their inspection. The broker must not only provide all necessary documents, but all employees must pass Commission’s perquisition.
CySEC treats brokers as financial companies and has some specific rules when it comes to bonuses. Commission noticed that often Terms & Conditions are not clearly written and are almost impossible to understand and that bonus is often used as a blackmail in order to stop the trader from withdrawing the funds. New legislation disables that type of business practice and provides better trading experience for the traders.
The list of CySEC improvements doesn’t end there. After a period where this regulating body was more of an uninvolved observer, it became cautious watchdog that really works on improving transparency and prevents scams. In recent past, CySEC prosecuted and fined even some well-established brokers who were not following their guidelines. They put more effort in controlling all necessary documents brokers have to provide in order to continue doing business in a legal way (keeping record of complaints etc), and even pay more attention to false advertising.
Transparency has become a top priority, and there are more and more procedures and rules to be followed. CySEC now requires clear T&C, and well-structured websites that explain the risks of financial trading. More active approach is proved to be better than a passive one, as binary trading is safer thanks to the new rules implemented by CySEC.
Some of the forex brokers who are regulated by CySEC are
As we already mentioned, regulation is not a guarantee for fair practice. There have been many cases of misconduct, spam and other fraudulent activities that CySEC had to react to. One of the most famous cases like this was the case of WGM Services Ltd, that was behind the broker known as EZTrader. The broker managed trader’s account without authorization and it cost the trader $30,000. Even before the broker was stripped of their license, Fair Binary Options blacklisted them and helped some other traders retrieve their money even before CySec revoked their authorization which is a just sign of our integrity and devotion to making binary options trading safer and more pleasant. Read more about EZtrader Blacklisting Case.
CySec often issues warnings on unregulated brokers in order to protect customers from the scam. Such was the case of Chelestra Ltd, the company behind the LBinary that added bonus to the client’s account balance without written permission and misused client’s trust by managing the account without authorization. Even though this broker was not regulated by CySEC they still felt obligated inform the public about the scam. We reported about this case soon after we suspected that LBinary was a scam. More information about this interesting case can be found here.
All complaints about registered brokers here can be submitted here, simply by filling an online form with all available documentation attached.
Binary Options Regulation US
The USA is a large market so it is not surprising that binary options brokers were trying to offer their services for a long time, but US government decided to enforce various laws and directions in order to protect their citizens. Sometimes, their protection is so strong that it disables potential traders and lowers the liquidity.
CFTC Binary Options Regulation
Commodity Futures Trading Commission (CFTC) is regulating body for the territory of United States that takes care of transparent, competitive and open markets, meanwhile protecting funds, consumers and public from frauds. It also regulates binary options, following the instructions by Commodity Exchange Act. What is interesting is that it is not illegal for US residents to place their trades with offshore brokers, but it is illegal for those brokers to do business with US residents, or better, to offer their services in the US market. It is complicated, even if it seems simple. Brokers registered in other countries don’t accept US traders, as it is considered illegal, so traders can choose between few unregulated brokers who still accept them despite the great chance of being fined and Nadex, Chicago Mercantile Exchange and Cantor Exchange although the last one offers fewer options, with Nadex being the most popular.
Nadex, or North American Derivatives Exchange, is derivatives exchange for the retail traders and is completely regulated by CFTC. Nadex can be easily explained if traders imagine it like a bridge between them and those who offer binary options. Now, as in most cases, there is a toll to pay if one wants to cross the bridge, so Nadex applies various fees to all transactions – from trades to banking. Something like that is unheard of in most binary options trading markets.
CFTC sees binary options as predictions markets and is known for pressing charges against most acknowledged brokers just because they offer their services to US traders.
If US traders have any problems during their transactions, they can contact their platform provider. Nadex customer service can be reached via email, just like Cantor Exchange. CME customers can use telephone or email for reporting irregularities. All suspicious activities can be reported to CFTC, as well.
Binary Options Regulation South Africa
Binary options are very popular in South Africa, as South Africans also want to take advantage of this lucrative way of trading. One of the most interesting things is that companies with headquarters in South Africa are not allowed to provide binary trading service to users in South Africa
Binary options in South Africa are regulated by the FSB or Financial Services Board, special regulatory agency that controls all elements and participants in financial markets. The main role of the Financial Services Board is to maintain safe and reliable investing environment in whole South Africa.
Mostly forex brokers are regulated in South Africa – most popular is CMTrading.
FSB also provides support for traders who have been scammed by bad binary brokers. They can use one of the numerous contacts available for FSB customer support and even reach for their Consumer Education department that will provide traders with more detailed information about the topic they are interested in.
Binary Options Regulation Canada
In Canada, binary options are considered somewhat of grey area and since May 2020 there aren’t any registered brokers. In the past, there were two regulatory bodies that monitored binary options trading in this country: Investment Industry Regulatory Organization of Canada (IIROC) that is enforcing the proficiency, business and financial conduct of dealer firms and Canada Securities Administrators agency (CSA) which is an umbrella organization for harmonizing and improvement of the Canadian market. It is important to make clear that binary options are not illegal but are defined as exotic options.
Yet, it still seems that Canada is not popular among brokers. The reason for that is probably that it consists of ten provinces and three territories and each of them has their own legislation which makes it harder for brokers to offer their services on the entire Canadian market. For that reason, Canadians mostly trade with regulated offshore brokers or unregulated brokers with a good reputation, even though Canadian authorities usually warn about unregulated brokers, but only because they are not regulated by them.
We can hope that in near future Canada will make some improvements when it comes to regulation. All Canadian citizens can complain about regulated brokers in Canada (in case there are any) to IIROC and CSA, and they should contact the offices depending on their residence province.
Binary Options Regulation British Virgin Islands
The British Virgin Islands is a British overseas territory mostly known for as offshore financial center. BVI is quite popular among financial companies as their banking laws are quite loose. Binary options are, just as is Forex, regulated by Financial Services Commission (FSC). FSC is more popular among forex brokers than binary options brokers, even though there are some brokers who have addresses in BVI but are regulated by other regulatory bodies, like ImperialOptions regulated by CySEC.
Binary Options Regulation Australia
Australian Securities and Investment Commission is defined as Australia’s corporate, markets and financial services regulator and an independent Commonwealth body. In Australia, binary options are considered financial product and according to the Commission, any entity that deals in, or provides advice about binary options to Australian investors must be licensed by Australian Finance Services (AFS), which is a part of ASIC.
Even though Australian customers may trade with European brokers (those regulated by CySEC), it is always better to use Australian broker if one is an Australian resident. Strict laws that are enforced on brokers registered in Australia are insurance for traders who want to invest safe and easy way. ASIC can retrieve their permission for binary options trading if they notice that a broker is a scam. The only broker regulated in Australia is HighLow, and as we haven’t received any negative comments we can say that they are a respectable broker.
Just like CySEC, ASIC also releases announcements about scam brokers and unregistered brokers who are not recommended for trading in order to protect general public as in the case of Opteck. Opteck is registered broker with CySec, but not ASIC.
ASIC regulated brokers are
In order to file a complaint about one of the brokers, ASIC requests traders to know the difference between various types of scams as they are not authorized to deal with all of them. Find more information about various scam types and how to report them here.
Binary Options Regulation France
When it comes to binary options trading, France is an interesting market. There are two regulating bodies: Autorité des Marchés Financiers (AMF) or Financial Markets Authority that regulates the stock market in France and Banque de France that oversights financial markets infrastructures, cashless means of payment and ensures security in a world of finances. Binary options in this country are defined as financial services.
Despite two regulating bodies, binary options trading is not completely regulated, but it is not illegal either. Brokers can register in France but, any brokers registered with other regulatory bodies inside EU are considered registered brokers in France as well. That is why it is always recommended that French traders trade only with registered European brokers.
AMF’s attitude towards binary options brokers’ advertising practices is somewhat hostile, considering they frequently publish blacklisted brokers. In September 2020, there were almost 250 brokers on the blacklist, some of them for the right reasons and some of them simply because they don’t have AMF’s approval. However, when visiting those broker’s websites, we found there are many brokers that are closed and most of them are not offering their services anymore so one has to rethink the way AMF updates their list.
But that is not the real reason we could say AMF is hostile: high taxes and fees are quite undesirable in the world of financial trading, so brokers prefer countries as Cyprus or Latvia. Other than that, French authorities established Jury of Advertising Ethics of the Authority of Professional Publicity Regulation (ARPP) that is an interprofessional body created in order to provide an ethical and professional environment in advertising, thanks to which broker can no longer use false advertising. The most popular broker registered in France is Banc de Binary.
In order to report scams and unethical business practices, simply fill the form available on the AMF website. Don’t forget to add all available documents, correspondence and print screens.
France recently banned advertising of binary trading services. Find out more.
Binary Options Regulation Italy
CONSOB is a regulatory body in Italy that reassures transparency and appropriate behavior by financial market participants, disclosures and of complete and accurate information to the investing public by listed companies, and that considers binary option betting. As they explained, binary options have a structure similar to betting, since they assure payment of the pre-set amount before the event occurs. Italian authorities are quite strict when it comes to binary options trading, and are ready to fine everyone who doesn’t obey the law with the amount as high as €500,000.
For example, in the European Union is quite common that every broker that has a license within the European Union is allowed to do business in any country within EU, but not in Italy. All licenses issued by other regulatory bodies, like CySEC or AMF, must be reviewed and approved by CONSOB in order to do business in Italy. As it was stated in Communication No. 12055030 of July, 2nd 2020:
… all subjects intending to provide investment services involving binary options to the (Italian) public must possess the necessary authorisation issued by the competent Authorities.
Since the Italian authorities view binary options as gambling industry and have very strict policies when it comes to this industry, CONSOB even blocked websites belonging to brokers who were accepting Italian customers like EZTrader, BOcapital, StartOptions, AnyOption etc., and the list gets longer every day. It is not unusual that traders find out after days or months of trading that they can’t access their accounts since they have been blocked.
As FBO reported, EZTrader turned out to be a scam and, in this case, Italian government did well by prosecuting them.
Unfortunately, Italy tends to block even the fair and honest brokers which is not good for their business, but also removes the block as soon as the broker gets the license. The first broker that got the license was 24option .
This regulatory CONSOB accepts reports only by filling the form available on their website.
Binary Options Regulation New Zealand
New Zealand is one of the few countries that regulates the binary options trading industry. Financial Markets Authority is a financial services regulator in New Zealand. Many platform providers are based in New Zealand, and their Financial Markets Authority is conducting Financial Markets Conduct Act. All brokers first must register at Financial Service Provider Register in order to do business in New Zealand. In order to receive the license, the broker must have a physical office and staff in the country, and obey many rules and laws such as that client’s funds and company’s funds must be completely segregated. They also have to be members of an external Dispute Resolution Scheme, which gives traders additional protection. BinaryTilt is a broker licensed in New Zealand. New Zealand customers cannot trade with FMA regulated brokers.
FMA regulated brokers:
New Zealand also blacklists the brokers who don’t have a license or are prone to malpractice. One of the cases like that was that of broker under the name of OptionsRider. FMA stated that the broker claimed to be registered with a nonexistent regulatory body in New Zealand. Such behavior is considered deceiving and is punishable by law. What is even more surprising is that the broker completely ignored the fact that everyone can easily check if a company is registered or not with Financial Service Provider Register simply by typing the unique code assigned to each company. OptionRider’s code was nonexistent. After short research we found out that there is a big chance this broker is a scam since users described their customer service as almost not existing, there are no owners mentioned on the website and the list of dishonest practice goes on and on. This only proves how important it is to check all the details provided by the broker before making a deposit. We strongly recommend not trading with this broker, but choosing one from Fair Binary Options top broker’s list instead.
FMA is always trying to protect public from scam so there is an online form on their website that should be filled in case one suspects there is fraudulent activity going on. Make sure to upload all evidence available as it makes your complaint look more serious.
Binary Options Regulation the UK
Binary options industry in the United Kingdom has been experiencing some changes recently. Since 2005, it has been considered betting and was a category under Gambling Act. That didn’t do much for the reputation of this alluring trend in the trading industry, so the UK government decided to define binary options as financial market derivative and put it under the regulation of Financial Conduct Authority. There were a public hearing and a thorough research under the supervision of a judge in order to decide whether binary options should stay in the domain of gambling, or be transferred into the sector of financial markets. At the moment, brokers still get their licenses issued by Financial Conduct Authority, but the final decision can be expected in early 2020.
Since the European Union is treated as one market, brokers regulated with other European regulatory bodies can offer their services in the UK as well, but keep in mind that it might change in 2020 if UK government decides to follow the example set by Italy. It is expected that in the future FCA will be the one providing licenses for the brokers, and Financial Policy Committee will supervise if all the brokers follow the necessary legislation. FCA issued licenses for several brokers:
It is important to emphasize that at the moment, FCA is not the official regulatory body, as the entire industry in the UK is in a transitional period. For that reason, traders cannot expect protection as in other cases with regulated brokers. FCA currently has no authority over prosecuting or penalizing foul brokers. As already mentioned, this problem will probably be solved in 2020.
Even if FCA is not the official regulatory body, traders can still report bad brokers, but keep in mind that FCA can only revoke their license, but can’t fine them at the moment. Here you will find detailed steps what to do in case of a scam, the first step being stop sending money. This regulatory body even gives useful advice on how to avoid being scammed, and what to do once the scam is reported.
Binary Options Regulation in Belize
One of the most popular countries among binary options brokers is Belize. Binary Options in Belize are regulated by International Financial Services Commission and are defined as trading in securities services. Because of some bad experiences in the past, Belize Government passed Offshore Banking Act in 1996 and Money Laundering Prevention Act in order to ensure that the country’s financial institutions are used for disguising illegal activities, as Belize is trying hard to create a reputable business environment.
In order for a broker to receive Belize license, they must be registered as a company in Belize, even though they don’t have to have physical offices in that country. Interesting thing is that regulated brokers aren’t allowed to offer their services to Belize residents. There are two exceptions to this rule: bank licensed under the Banks and Financial Institutions Act (CAP. 263) or the International Banking Act (CAP. 267) or the Government of Belize or a public statutory corporation wholly owned by the Government. The broker must conduct their business in another currency and basically, must follow IFSC’s set of rules that can be read here.
Some of the brokers registered in Belize are:
In case of any difficulties, traders can always contact IFSC using the online form that can be found here. All regulated broker can be found on their web page, on the List F. Keep in mind that name of the broker and company behind it aren’t always the same. As many other regulatory bodies, IFSC also releases information on brokers who lost their license, so be sure to follow their web page in case you trade with broker registered there.
Binary Options Regulation in Vanuatu
Recently, Vanuatu Financial Services Commission has become increasingly popular among binary options brokers. Vanuatu is a small island state formerly known as New Hebrides Islands that provides numerous benefits for financial business, but low tax rates as well. VFSC provides fast registration accompanied by low expenses so it’s not surprising that more and more brokers are choosing this regulating body. This regulatory body has low initial capital requirement compared to many other regulatory bodies – only $2000. When registering with VFSC, the company is not obligated to have physical offices in the state or local staff.
Unlike CySEC and some other popular regulating bodies VFSC doesn’t provide any information about traders support. There is a contact form available on the website, but it is important to mention that this regulatory body seems more business-oriented than dedicated to protecting the traders.
Binary Options Regulation in Japan
Binary options brokers are regulated by Financial Futures Association of Japan (FFAJ). This type od financial trading has been under the regulations since 2020, when FFAJ created an extensive set of rules that apply to all regulated brokers. As always, not all brokers that provide their services in Japan are regulated, but there are very few markets in the world that managed to prevent unregulated brokers from operating.
Binary trading in Japan is somewhat different than in the rest of the world. The lowest expiration time is 2 hours, which means that there are no fast options to be traded with regulated brokers. Fast options are usually riskier, but also more profitable for the trader.
Transparency in determining the final price is imperative, so Japanese agency created a set of rules that apply to this part of binary trading. Also, Japan is not very keen to bonuses. FFAJ believes that high promises of additional bonuses can significantly decrease trader’s possibility of making a good judgment. Affiliate advertisements are preferred, but only if they don’t contain cash-back promises. All advertising material must be carefully managed in order not to deceive traders that binary options are risk-free, so all types of gifts etc. are not welcome. The brokers are obligated to present prices based on payout amount. Unregulated brokers don’t have to follow this legislation, but on the other hand, they can face various fines.
FFAJ can be reached via contacts listed on the Japanese version of the website.
Binary Options Regulation in Spain
Financial trading in Spain is regulated by National Securities Market Commission (CNMV). It has been established in 1988, as part of a great reform of Spanish financial sector in order for Spanish market to be compatible with EU legislative.
As in many other European countries, binary options are not regulated by any law, and CNMV is not providing any permissions for binary brokers. But, as Spain is part of EU it can be considered that it is simply because of MiFID and CySEC that regulate them on much higher level. All brokers licensed by CySEC can legally operate in Spanish market, but CNMV still publishes warnings about scams on a regular basis.
We can expect to experience this situation more and more often, as Eurozone is usually considered to be a single market. It still remains unclear whether CNMV has any legal power when it comes to prosecuting binary brokers, as binary options are not regulated by any laws on the territory of Spain.
In the case of any problems, traders can report the scam broker to the CNMV by using the online form available on the website. Keep in mind that the form is for Spanish citizens only, as the ID number is required in order to file a complaint.
Binary Options Regulation in Israel
[Update] ISA bans Binary Options
According to reports sent by ISA in MArch, 2020, all types of binary options trading are banned in Israel in a way that brokers cannot offer this service or use advertising towards Israeli customers. However, the question of doing business between Israeli citizens and offshore brokers remains unanswered, as due to strict regulations almost no broker wanted to be licensed by ISA anyway. Also, the status of companies who operate in Israel, but offer their services outside the state of Israel and are regulated in other countries remains unsolved.
In their publication, ISA mentioned how binary options should be defined as gambling and not as an investment (which can make traders wonder how come there are so many successful strategies available in order to research the market and make a proper decision).
Israel is one of the countries that takes binary trading very seriously, especially after raising the tax on capital gain for 25% which forced many investors to look for their luck elsewhere. Binary options were the logical choice.
Binary trading in Israel is regulated by Israel Securities Authority (ISA), the government body that was established in 1968. The role of ISA is to prevent frauds, insider trading, and other suspicious and possibly illegal activities that can harm Israeli investors. It is important to note that ISA is not very favorable towards binary trading, as many believe that binary trading caused the collapse of Tel Aviv Stock Exchange after capital tax raise.
More on binary options in Israel read here.
Whatever their opinion is, the fact is that binary options brokers are regulated in Israel which makes trading completely legal. The new law was implemented in March 2020, which means that all brokers who want to provide their services legally in Israel must obtain a license. ISA goes much further than many other regulatory bodies, as brokers have to update the status of their clients regularly, provide monthly, quarterly and yearly reports and follow a complicated set of rules in order to maintain the licensed status. If traders experience any difficulties or interact with a scam broker, they can use contacts listed on the bottom of ISA’s webpage.
Binary Options Regulation in Malta
Binary options trading is very popular in Malta where it is regulated by Malta Financial Services Authority (MFSA). When it comes to Malta, binary trading is completely legal and regulated, and all companies who wish to provide such services can apply for a license.
There are three important categories when it comes to binary trading in Malta:
- Category 1 license (17,000 Euros in capital) – allows brokerage activities, does not allow holding of client’s funds
- Category 2 license (125,000 Euros in capital) – allows investment services and holding of users’ funds, but denies trading on company’s account
- Category 3 license (730,000 Euros in capital) – allows investment services and holding of users’ funds, allows trading on company’s account
Binary brokers in Malta have to wait in average 6 to 8 months to obtain their license while annual license fee costs between 3,000 and 10,000 Euros. Brokers also have to have offices in Malta and two senior managers, with investment opportunities offered only from Malta.
MFSA also has an online form for traders who feel they have been scammed by their binary broker. MFSA is asking of traders to add as many details as possible in order to provide the best assistance possible.
Binary Options Regulation in Russia
Binary options trading is very popular in Russia, and there are many brokers present on the Russian market. It is important to notice how Russian Central bank (CBR) is in charge for supervision of all financial products present in this country.
There is also a regulatory body called CRFIN, Centre for Regulation in OTC Financial Instruments and Technologies. Russian licenses are provided for specific types of trading, and there is no possibility for a broker to offer forex and binary trading with a single license, but must have both.
In order to get a license, binary brokers have to deposit 2 million Russian Rubles and have a minimum capital requirement of 100 million Rubles (1.2 million dollars). All officers, directors and other significant employees are obligated to have a proof of relevant experience in the field and clear criminal record. The broker also has to show a business plan but is not obligated to have shareholders physically present in Russia.
One of the brokers that has CRFIN approval is 24option.
Traders who find themselves to be in contact with a fault broker can contact CRFIN easily by filling the online form available on the website. There they can attach all necessary files and explain their situation.
What are Binary Options? – Honest Review
Binary Options is a financial instrument to trade on long or short markets in a certain period of time. The Trader only got 2 options: Win a high amount of money (75% – 95%) or lose the investment amount for this trade. It is like betting on rising or falling markets. Binary Options are very flexible. It is possible to trade any financial market and use different time horizons (starting from 30 seconds).
- Call (Higher): Make a forecast for rising markets
- Put (Lower): Make a forecast for falling markets
Make a forecast for the future price direction
In this article, I will show you exactly what are Binary Options and how do they work. Knowledge is the key to success. Read about the risk and the opportunities to make money in the following text.
Where to trade Binary Options in 2020?
In the next steps, I will show you how Binary Options (Wikipedia article) work. You will understand it in a few moments. But first of all, where to trade Binary Options?
You will need a Binary Options Broker (see the table below). I searched after the safest companies which give the highest return for traders. There are different companies around the world who provide this financial service. You can open a free demo account. This is an account with virtual money so you can learn how to trade without risk.
- You need a company (broker) which provides the financial service (Binary Options)
- Open a free demo account with virtual money (Virtual trading without risk)
|1. IQ Option||(5 / 5)
High Yield 92%
Is Binary Options Trading safe or not?
Safety is the most important point in online investing. You should choose a good and reliable broker which is safe. I recommend using a regulated company for your investments. Have a look on my full Binary Options Broker Review to find the best one. There are regulated and unregulated companies for trading. It always depends on the broker to trade safely Binary Options.
I did a lot of research and clearly, I can say that a regulated broker does not cheat to its clients. Normally unregulated brokers do not cheat too. But it is not 100% safe because sometimes these are small and unknown companies.
It is safer to trade with a regulated broker than with an unregulated one.
In conclusion, you should use a regulated broker for trade Binary Options safely. It always depends on the Broker if it is safe or not. Do the research by yourself and read my review about the broker on this website.
Example of regulation or license
Safe and well-known regulators are:
What you really need to know about online platforms:
There is a huge diversity of Binary Options Platforms and you have to check out what is your personal favorite. Nowadays developed software is very flexible and available for any device. It is possible to trade with the computer (browser and desktop), smartphone and tablet. That means you can trade from everywhere around the world if you got access to the internet.
Especially for a beginner sometimes it is hard to learn to trade with a new platform. There are a bunch of options which can confuse you. Most brokers will give you education material like video tutorials or step to step guides. Also, you can ask the support for help by phone, chat or email.
A platform for any device
Flexibility and charting are provided by the platform. You can do a personal chart analysis with indicators, technical tools, and different chart types. Sometimes you will get access to economic news directly in the platform. Indicators are known for giving you feedback on the market price at the moment. They are customizable like you want. So it is possible to analyze different timeframes.
Today Mobile Trading is one of the most important factors for trade successfully. It is a great opportunity to boost your profit. In the past traders could not trade online or via mobile phone. So the options were much lower for making a profit. Apps are available for Android and iOS users or any other device. Check out your trading account 24 hours per day via your mobile phone.
In my opinion, it is better to use the web-based platform with your computer for analysis. Often there are a lot more functions than in the app. Furthermore, you can see the chart more detailed and a higher range of it. Professional analysis can be made by using a computer.
Binary Trading Tutorial | Step by Step Guide
As a trader, you can choose between a lot of different assets on a Binary Options Platform. You can trade Forex, Stocks, Commodities, Cryptocurrencies and more. This trading tutorial will show you how it exactly works to trade the financial product. The process is always the same as you see in the video and picture below. Just practice it in a free Demo Account.
Learn how to trade successfully
Now you have to imagine and predict the asset price direction for the future (forecast):
You can use the specially programmed trading platform of a Binary Options broker to analyze the charts and get trading ideas. It is very important to have a good working strategy for maximum profit. Beginners should use technical analysis for trading the chart. On the broker platform, you can learn more about it in different education videos/centers.
Therefore every Binary Option expires after a specified time. You can use the time horizon between 30 seconds or 5 months or more. Sometimes it depends on the broker. As you see you can trade short-term or longterm Binary Options.
After you have decided on the direction and the expiry time for your trade you can “sign” the contract with your broker. Just click the call or the put button. On some platforms, you have to confirm the trade.
- Call (Higher): The price will go up in your expiration time
- Put (Lower): The price will go down in your expiration time
If you are right in your decision, the broker will pay you a high asset profit of 75-95%. The trade automatically closes after the expiry time. Sometimes the broker allows you to close the trade before the expiry time ends. That is a way to reduce the impact of a wrong decision.
That means if you invest the amount of 100$, you can earn the amount of 195$ on a certain time horizon. 100$ is the return of your investment and 95$ is the profit.
Binary Options Platform Tutorial for beginners
- Search for an asset with a high profit. If you trade the assets with the highest yields in conclusion from my experience the result will be much better in the end. Some Binary Brokers offer you different account types with different asset profit.
- Analyze the chart on the platform. You can choose different time frames, indicators or financial news for your strategy. Every Binary Broker offers you some educations, too. Learn in webinars, videos or coaching the best strategies of the world.
- Now you should select the expiration time of your Binary Option. There a lot of possibilities for your trade. Some traders like it to trade short-term options and some other traders like it to trade longterm options.
- Choose an amount you want to invest in your trade. The most time it starts at 1$.
- At latest trade the Binary Option with a call or put. There are only 2 options in the market, that’s why it is called “binary”. In the end, you earn a high yield or you lose your selected amount.
What are the conditions Binary Options Trading?
You can trade any asset with Binary Options. It can be stocks, commodities, forex or cryptocurrencies! Most brokers give the option to trade more than 100 different assets. The expiration time depends on your broker. Some companies provide Binary Options with a time horizon of 30 seconds or less. These days you get a lot of different options on every broker.
- Trade stocks, forex, commodities, cryptocurrencies, and more markets
- Choose between a diversity of time horizons (short-term – longterm)
Yield – The return of investment can be high as 95%+
As the time horizons, the yield (return of investment and profit) depends on the broker. Often there is a possibility to get a high payout of more than 90% of your investment but there is no rule for the value of the yields. Sometimes short-term trades got the highest payout and sometimes long-term trades got the highest payout. In comparison to my experience, the yield is between 70% and 95% for standard accounts.
Another way to boost the yield is to get a VIP account type. Most of the brokers offer different account types, which are linked to the deposit amount. For example, you will get a VIP account if you deposit more than 3000$ on IQ Option. Not every broker got the offer of account types but you should search for it if you plan to invest a high amount of money.
Are Binary Options risky or not?
Binary Options are risky to trade, but there are advantages why the risk is less than trading other financial products. Especially new traders fear the loss of a high amount of money. With binary trading, you can only lose your bet amount. Traders clearly see what they can lose in a trade. Compared to other trading instruments this is a big advantage because the risk is limited always.
Another advantage is that you get a high asset payoff no matter how much the market moves. The asset price just has to be above or under the entry point. Traders like this financial product because it is so easy to understand and to calculate the risk and the trade profit.
Only invest the money which you can afford to lose in the worst case.
Binary Options Demo Account – Yes or no?
It is very important for beginners and new traders to practice the Binary Options Trading. Most brokers give you a free demo account. It is an account with free virtual money. You can always recharge the account with one click. It is risk-free trading.
Every trader should learn more about the trading platform before he is going to invest real money. Also, you can learn new strategies or try out different methods on the market. First, develop your own strategy with virtual money.
Most brokers offer a free demo account.
Opening your first real account
For trading with real money, you have to fulfill different criteria. On most brokers, you can trade and deposit without verification of your account. In my opinion, every trader should verify his account before deposit money. This can prevent annoying errors and waiting times. For a full verification, you need to complete the account setup.
Sign in with your real personal data. That includes full name, birthday, real address, email, and your phone number. After that, sometimes you have to upload the required documents for the broker. The company checks if you are a real person. Upload a picture/copy of your Passport. Sometimes they require a utility bill too. In most cases, the verification only takes 24 hours or less. With some companies, you do not need this verification process.
How much money do I need for Binary Options Trading?
You can start trading with a very low amount of money. Especially on IQ Option, you can open a live account with a 10$ deposit. The minimum trade amount is 1$. The upper limit is open for your trades. Have a look at my reviews to find a broker which fulfill your requirements
From my experiences as a trader, it is possible to make a huge amount of money with the right strategy. Binary Options are the tool for trading with a small or big amount of money.
Facts about the deposit:
- Start with only 10$ in your account
- Trade with 1$ per trade
- You can easily trade with high amounts too
- The minimum deposit depends on the Binary Options Broker
Easy deposit and withdrawal
As mentioned before the deposit is easy as the withdrawal of profits. On most brokers, there are not any fees for deposit and withdrawal money. For payments, you can use more than 20 different methods. It is possible to capitalize on the trading account in a few seconds. In most cases the payout takes the time of 24 hours depends on your broker.
Payment methods are depending on the broker:
- Credit Cards (Master/VISA)
- E-Wallets: Skrill, Neteller, FasaPay, ePayments, Yandex, and more
Get a free Bonus for your deposit
The most brokers offer a free bonus for your deposit or risk-free trades. The bonus amount depends on the deposit amount. It can be a 20%,30%,50% or 100% bonus. In other words, they give you a higher bonus for a higher deposit. Furthermore, some brokers allow trading risk-free trades. If you lose a trade, the broker pays back the lost money in the form of a bonus.
The bonus is not completely free. Sometimes traders have to trade a high turnover of the bonus. For example, make a turnover of 30x of the bonus to get the bonus withdrawn. If you are not satisfied with the conditions in most cases you can deactivate the bonus. A bonus is a good opportunity to grow a bigger account and trade with more money.
Get a free bonus now
Can you really make money with trading Binary Options?
The key to your success is to get a good education and find a professional strategy. In addition, you have to control the risk with sensible money management. In this article, I showed you an insight into profitable trading with Binary Options.
It is easy to make money with Binary Options but you have to be prepared. The markets are not easy to trade for beginners and it takes time to trade profitably. You will not see success directly. From my experience educated traders do not blow up the account. They earn money constantly. Read through my other pages to get deeper knowledge.
- Education: This is the most important point for beginners. You should be prepared for the markets and know how the financial product works. There are different tutorials on the broker webpage or on my website to learn the functions. In addition, it should be easy for you to use the trading platform of your broker. Just practice in the demo account until you feel comfortable. Moreover, most brokers offer deeper knowledge. There are webinars, coachings, and tutorials. Education and knowledge is the key to making money with Binary Options.
- Strategy: Develop or learn a professional strategy for trading. You have to know what you are doing in the market. It is like a system for you which always have to repeat. Without a proper strategy, you will blow up your account. There are different ways to learn a strategy. Use the knowledge of a broker or my website.
- Money Management: most traders fail to control the risk. In my opinion, money management should be sensitive by using 0,5 – 3% of the account balance per trade. Sometime a losing streak will occur. By using sensitive money management you can trade without emotions and you can trade enough trades without running out of money.
In conclusion, you can really make money with trading Binary Options but you have to learn and invest your time in the right knowledge. The demo account is the best way to practice before you start investing real money.
Are Binary Options legit or not? – My scam review
In my opinion, Binary Options are not a scam for your money. The financial product gives you the possibility to invest in short or longterm opportunities in the market. Binary Options are so popular because they are so easy to understand and you can make a lot of money in a short time.
It is very important to choose a good broker. Some small brokers are scamming users, that’s why a lot of people think Binary Options are a scam. Definitely, it is not a scam if you trade with a safe company.
Basic trading checklist for beginners:
- Choose an asset you want
- Forecast the price movement
- Choose a variable expiry time of the trade
- Bet an amount starting 1$
- Trade a call (long) or a put (short) option
- Get profit
- Payout the profit
On this site, I have shown you how the financial product is working. I think you can easily understand it now and start trading with more security. On my other sites, you can learn more about Binary Options. Happy trading.
How to avoid scams as beginner
The problem of Binary Options is that they are not a scam, but some brokers or financial educators are scammers. Every time before you start investing real money you should do a sort of research. You should pay attention to real reviews or advice from professional traders.
Perfect For Beginners!
Free Demo Account!
Free Trading Education!