The Best Binary Options Broker 2020!
Perfect Choice For Beginners!
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Free Trading Education!
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How Does IQ Option Work? Definition, Features, Security of a Leading Binary Options Broker
IQ Option No. 1 Software
Although considered a relatively new trading platform which caters mostly to investors who want to realize returns within short periods of time, binary options have been around for quite some time. These options provide traders with payouts that come either in the form of a fixed amount or nothing at all. Their capability to quickly reward investors has made these options very popular among traders.
In this article, we will focus on binary options broker IQ Option. We will discuss how the trader works, its notable features, pricing, benefits and how you can make your investment profitable from enlisting its assistance.
But first, let’s explain the basics of binary options.
Binary options have two basic types–the high-low and the asset-or-nothing type options. The former is the most general option, having a specific expiry date/time, along with a strike price. Under this type, traders get a fixed return upon the option’s expiry. With the latter, investors are paid based on the underlying security’s total value. In some cases, binary options are mixed with other instruments to earn higher yields.
To invest in binary options is essentially to bet on whether the stock or commodity price will rise or decline either above or below the strike price by the time an option expires. For transparency purposes, brokers commonly disclose the strike price, expiry, payout and risks associated with an option.
Such are the basics of binary options investing, but more importantly, an investor should enlist the services of a binary options broker in order to profit from such investment. These brokers are more than capable of analyzing trends that more often than not lead to sound investment decisions. There are many binary options brokers out there who are willing to provide investors with the assistance they need in navigating the market.
What is IQ Option?
Although a considerably new player in the binary options market, IQ Option binary broker is known for striving to improve itself by always being on the lookout for new binary options technologies. The platform makes use of both a desktop solution and a mobile app in helping investors analyze markets and realize profits in the process. It prides itself for ease-of-use, making binary options trading a simple task. So how does IQ Option work? We will seek to answer this question in the following section.
Signing up for the service is a breeze, all you have to do is fill out a form and provide identity information. What’s amazing about IQ Option is that only a minimum deposit of $10 is required, way cheaper than any other binary options broker. What’s even better is that depositing money is easy, with a variety of methods available to investors. Upon completion of the registration process, the broker will start sending you emails that are meant to help you to learn more about binary options trading.
So how does IQ Option work? The broker has two account levels, Real Account and VIP Account. With Real Account, you get to have access to trading opportunities and can participate in tournaments and quick withdrawals. The VIP Account, on the other hand, allows the use of real money to trade while getting to have your very own personal manager. All these on top of all Real Account features. Another nifty feature of the solution is its favorite assets section. Using this functionality, you can select your favorite assets and allow them to be displayed every time you login. No need to look for them, just login and trade right away.
The software’s interface is pleasant to the eyes and needs but a few seconds to load needed tools. It provides users with easy to understand graphs and has a zoom in functionality that you can use simply by pinching the screen. All it takes is a couple of taps to place a trade. The platform is highly-customizable, enabling users to add indicators, trend lines and other critical data. This downloadable solution supports both Android and iOS devices.
The service has its own native mobile application, which pushes binary options trading to new heights. The mobile app is perhaps among the best in the market owing to its ease-of-use and great graphics. It is likewise fast, making it popular among most traders as opposed to the desktop version. The app is ideal for traders who are always on the go, allowing them to trade on the fly, anytime, anywhere. It has notable security features, among which is the ability to allow users to login using their fingerprints or if they prefer, through their Facebook or Google accounts. The app sports all desktop features in a simple yet mobile dashboard.
The Best Binary Options Broker 2020!
Perfect Choice For Beginners!
Free Demo Account!
Free Trading Education!
Get Your Sing-Up Bonus Now!
Only For Experienced Traders!
If you are a small trader you are most likely to have a standard binary options account. It simply means that although you are an active trader, your total deposits does not go well over $3,000. In the event that you accumulate deposits in excess of this value, IQ Option will assign you a VIP account.
A VIP account entails many benefits to traders. In general, such account is a high-yield asset whose profits could reach as much as 91%. What’s good about this type of account is that it is accompanied by an Educational Section, which will teach you all about money management, indicators and other valuable lessons in binary options trading.
Binary Options Tournaments
IQ Option’s Binary Options Tournaments is a feature unique to the platform. What sets it apart from tournaments being offered by other binary options traders is that it is the most sophisticated one around. All you have to do to enter into a tournament is pay an entry fee which ranges from $5 to $20. Upon entry, you will be provided with virtual money to be used in the tournament. Individual tournaments have different durations, which could last anywhere from a day to a month. Your goal as participant is to make as much profits as you can. The trader with the most profits wins the tournament.
To further lead investors to the path of profitability, the service has developed a tool called IQ Option trading patterns. This feature, which can be accessed through the service’s website, can greatly affect the outcome of your investment. IQ Option trading patterns offers video tutorials on just about every trading pattern there is. It will teach you all about using such patterns in just a short time. The tool is quite accessible as it is located just beside the trading platform.
So you want to invest in binary options but are afraid of security risks? This is no problem for IQ Option, which ensures that your money and personal data are secure at all times. Such is further improved by the fact that the platform is regulated by the Cyprus Securities and Exchange Commission. If you want to give the service a try first, the vendor provides a demo trading mode.
The IQ Option demo account can be accessed within seconds, all is needed is to login with a Facebook account and you can commence trading immediately. Because the demo account is meant to teach you about binary options trading, profits are limited to 50 to 60%, a bit limited for those who are used to high gains. However, it is more than enough if you just want to test the platform.
How to Trade?
As one of the most advanced and efficient binary options trading platforms in the market, IQ Option has basically made a game out of binary options trading. The broker highlights every wining trade, directly notifying users through its page. Such notifications come with sound alerts and graphs. To be able to start trading, you must make a minimum investment of $1 from a minimum deposit of $10, undoubtedly one of the lowest rates out there. If you are one of those who want to trade big, you can invest up to $5,000. The broker caters to international users, supporting languages like English, Russian, Turkish, German and Chinese, among many others. Customer support is quite excellent, which come in the form of email, live chat and tickets.
Despite all these benefits, you should keep in mind that even as trading is meant to rake in profits, you could also lose money from doing so, and the broker is no exception. IQ Option’s financial products still involve high risk, which is why the broker issues a risk warning to all traders.
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.
7 Binary Options
Binary options trading has completely changed Jimmy`s life and he wants to share his story with other traders and 7 Binary Options readers.
Everyone dreams, as I did, of earning additional income with little to no time or effort. After years of wasting my time on unprofitable means of making additional income, I knew there had to be a better way. Now I can honestly boast that I am earning about £800 – £1500 every week with little time or effort, just a few hours. And I can do so from the privacy of my own home. I can even make trades while I am on the go. The additional income has been more than enough to provide me with the lifestyle I have always dreamed of for myself and my family.
Let me introduce myself. My name is Jimmy and I am an average white collar worker with a job that brings in a mediocre, but consistent, paycheck. However, when my wife surprised me with the news that she was expecting twins, my entire world was shattered. I really wanted her to be able to be at home with our babies so I needed to figure out how to provide for my quickly expanding family.
A colleague at work introduced me to the exciting and lucrative world of binary options trading after I opened up to them about my impending anxieties regarding my lifestyle changes. I was quite trepidatious at first, as I was sure that was just another dismal attempt to earn some extra cash that would fail miserably. However a few days in, I was feeling quite confident about my decision to go with binary options trading. It was a real eye opener. It not only gave me the extra income for which I so desperately yearned, but it gave me extra time to spend with family as well as enjoy my hobbies which include gardening and fishing.
Admit it, you are interested and want to know how binary options can work in your behalf. If I can do it, anyone can make a go at binary options trading. It is really simple from the science behind it to the process of executing trades. I had no prior knowledge about the money market or any of the financial lingo, as well as zero trading experience. Binary options trading was indeed the most beneficial type of trading for those who have little to no experience in the financial trading market and want a simple solution that can easily earn them £350 from the comfort of their own home.
The only things you require to begin trading a few minutes a day online with a decent internet connection (either at home or mobile) and an account with a binary options trading broker. I prefer to execute my trades on the commute to and from work as it saves time. Actually, my trading has reached such a level that I am considering quitting my job and making binary options my full time job. I believe i have formulated a binary options strategy to perform my trades that is both simple and highly profitable.
Allow me to break it down for you. Of course, when I first begin trading I was not aware of the amount of risk involved in this industry so I did not want to wager high amounts of money in case it did not go in my favor. I opened a basic account with the initial minimum deposit which was £250. I also did not allow myself to bid higher than this amount until I was able to ensure that I was able to control the risk factors. I occasionally lost a few trades initially, but the losses were small and I was nothing each mistake so I could avoid it in the future and improve my strategy. It was only a matter of time before I was able to determine a fairly easy and highly effective strategy of trading which now gives me an accuracy rate of about 90%. As i execute trades, know can earn a substantial income that provides me with a comfortable lifestyle that allows me to make future plans. For example, I execute trades by predicting the movement of an asset of an expiry time, for a just a few hours a day.
You are probably wondering what exactly is my winning strategy, correct? I have no problem sharing this with you in the hopes that it you will find it straightforward and simple to both understand and execute. The best thing about my strategy is it’s not necessary to have presupposed knowledge of the binary trading market. It also does not strictly follow the news that may affect trading rates. These factors work in the favor of others, but in my opinion, I focus solely on the market trends. In other words, I simply thoroughly examine the price charts of each asset thus focusing on determining specific trends in these charts that will indicate in which direction the trend of each asset will follow.
I have determined that certain patterns tend to repeat themselves. If you can quickly spot these trades you will be able to profit greatly as all you need to do is determine if the trade will do UP or DOWN. In order to understand this process a little better, please see the below charts for specific examples.
The UP Trend Chart obviously exemplifies the UP trend, when the price of the questionable asset is continuing to increase during the expiry time. Once you think you notice a trend, you must immediately execute a “Call trade.”
This chart illustrates the Down Trend. The price fo the asset has rapidly been declining since roughly around 14:00. Once you notice this trend, you must execute your trade urgently.
NEUTRAL trend chart
When you notice the asset price has remained the same for quite some time, this is referred to as a Neutral Trend, when you spot this type of trend it is wise to not execute a trade and hold out until you notice an UP or DownTrend.
With time and experience you will be able to spot these trends quite easily in order to generate the most profitable traces. All it takes is the ability to analyze and execute trades as quickly as possible. This has really worked wonders for me and I believe it can do the same for you.
Here are three simple steps in order to start profiting with binary options trading:
- Create an account with a reliable broker
I personally am registered with “Banc de Binary” for the following reasons. They have established a long history in the market. They are also regulated which instills both a sense of confidence in security in their traders. Their trading platform is extremely user-friendly as well as effective and very efficient. The mobile app they offer their traders enables me to execute trades while on the go. I am extremely happy with this broker and highly recommend them if you want to start trading.
- Make an initial deposit to fund your account
In order to start trading, you are required to make an initial deposit to fund your account. I find that funding my account with “Banc de Binary” is not only simple, but highly secure. I t can be done with bank transfers, digital payment or credit cards (Mastercard and Visa). I recommend that new traders only make the required low minimum initial deposit, which is most often £250. Also start by making small trades until you gain experience and confidence and are able to spot trends. Once you are able to do so you can execute higher trades thus increasing your profits and gains.
- Begin to execute trades
Once you have a funded account with a binary options broker, trading is quite simple. All you have to do is choose the amount you wish to trade, the expiry time and most importantly, the asset. Once you decide the direction of the trend you would hit the UP (Call) or Down (Put) Button. It’s that simple!
Trading binary options has made a huge impact on my life and I guarantee it can do the same for yours as well!
Start trading now with Binary Option Robot
Start trading now with our recommended Binary Options Brokers.
What is Binary Options?
Binary Options, also known as Digital Options or All-or-Nothing Options, have been available to the public-at-large since 2008. Basically, Binary Options have two possible outcomes: “in the money”- when a specific asset reaches a certain value after the fixed expiry time and “out of the money”- exactly the opposite outcome. Binary Option Trading is a revolutionary way in which traders can achieve high returns within a very short period of time. In case the investment doesn’t expire “in the money”, some brokers give a specific percentage of the cash invested as a refund to the binary option trader. This refund can go as high as 15% of the original investment, so not all is lost if your option expires out of the money.
Is Binary Options a Scam?
Before starting to explain how binaries work, I have to address an important issue: Binary Options have been surrounded by a vibe of Scam right from the start and this makes a lot of people stay away from the industry. Here’s the long story made short: Binary Options are NOT a Scam! But some binary options brokers definitely are. Binaries are a legit trading instrument and cannot be called scam but to trade them, you need a brokerage and unfortunately, among these brokerages, there are a lot of scammers. This doesn’t mean that binary options are a scam, however, it does mean you must be extra careful with whom you are doing business with. Once you’re done reading this article, go over the how to avoid binary options scams guide.
Think about this: a guy sells you a fake iPhone, saying it’s the real deal. After a while, you realize you’ve just bought a fake and you’ve paid full price. Does that make Apple a scam. NO! If someone sells you 14 karat Gold and claims it’s 22 karats, does that make Gold a scam. See where I’m going? Binary options are not a scam, but some of the websites that offer them are scams. Open your eyes when reaching for the wallet.
How does Binary Options Work?
I’ll try two different explanations; the first will be broader for those of us who don’t really understand what Binary Options are all about. Plus, a video below.
The Binary Options trader uses a wide range of assets, from Forex to Stocks, Indices and Commodities. These are commonly referred to as underlying assets because the value of the option is derived from their value, making underlying assets the backbone of binary option trading and we win or lose out on binary trades based on the movement of these underlying assets. Basically, a trader speculates that the price of X asset will be above or below the opening level at expiry time and if he is right, he will receive a specific, prearranged profit. Let’s say, I speculate Google will be above X value within one hour (X is the opening price level of Google), I will put my money on the Call Option (in contrast to the Put Option – when I speculate that the asset price will be below X value). If the Google stock is just one point above X value when my option expires, one could generate up to 85% profit from the investment. Many brokers will refund up to 15% of the investment loss in case I was wrong in my speculation.
Nowadays, with the Binary Options market growing rapidly, traders have many more trading options, such as Boundary Options, Touch Options, Up/Down, and the more recent type of fast trading called 60 Seconds trading where all options expire after one minute, so you could potentially increase your account balance almost faster than you can say “I love Binary Options Trading”. Each category of options is slightly different from the others in terms of its properties. Our readers can find more information about the different trading tools and options, by having a glance at our binary options glossary.
How are Binary Options Traded? Simple Explanation
David is the average trader. He keeps track of many American and Far Eastern markets. He checks out the live, online financial news; sometimes he even reads financial magazines. Today, David was checking out Reuters when he saw something about a rush for gold in India. Immediately, David checked with his favorite Binary Options broker, and started looking at the gold charts over the past few hours. The gold value was 1733.01 points. David speculated that in exactly one hour the gold value will exceed 1733.55 points, and so he decided to invest $100 for the option to gain 75% return from his investment. David checked the Call Option, and then started biting his nails. After 45 minutes, the gold value was still less than 1733.55 points, but David had faith in his choice. Two minutes before expiry time the numbers were still not so good for David. Egad! After exactly one hour, the gold value reached 1733.62 points. “Bingo!” David shouted while checking his account balance, which was now $75 higher. In case David was wrong and the gold value was lower than the expected value, he would have received up to 15% return from his losses, so his choice wouldn’t have been a complete loss.
How to Trade Binary Options in 3 Simple Steps
Although the explanation above is pretty straightforward, I want to make sure that everyone understands how easy it is to place a binary options trade, so I will use a visual representation – yea, pictures:
Step 1: Pick an Asset
All brokers will display the available assets in an easy to access and easy to see list. It may be placed to the right, or to the left, but you will definitely see it. In this case it is to the right.
Step 2: Choose Direction (Call or Put)
Once you’ve decided what you are going to trade, it’s time to decide if the price of that asset will be higher or lower at expiration time, compared with current price. Look at the blue line on the chart – that represents current price (of course it looks different on other platforms but it’s very easy to identify). If you think the asset price will be above (higher), you will choose Call and if you think it’s going to be below it (lower), you will choose Put. Remember, Call is for above, Put is for below.
Step 3: Choose Expiration and Investment Amount
Now that you’ve decided on direction, you have to choose an expiration time. These are usually preset by the broker so you will only be able to pick from a given list of expiries. In our example we are trading Short Term options so we can pick between 30 seconds, 1 minute, 2 minutes, 3 minutes or 5 minutes. In other words, we have to answer the question “Will my asset be higher or lower than current price after 30 seconds, or 1 minute, or 2 minutes (etc.)?” When the 30 seconds (or whatever expiration we have chosen) have passed, we will know the outcome: if price is higher and we’ve chosen Call, we win. If price is lower and we’ve chosen Put, we win. Any other scenario means we lost the investment but, as stated above, some brokers offer a refund of up to 15% even if your trade wasn’t successful. Next you have to choose how much you want to invest on the trade. This depends on your money management rules, your skill as a trader and how much “trust” you have in the trade. Picture coming up:
Step 3.1 – Open Trade
Some brokers let you choose Call or Put, expiration, investment amount and have a separate button to open the actual trade that activates only when all parameters are set. On other platforms (this is the case in our example), once you click Call or Put the trade will be opened automatically. If you are trading on such a platform, make sure you set everything up before hitting Call or Put.
Where Can I Trade Binary Options?
To trade binary options you will need to open an account with a brokerage. Since 2008 when binary options became available to the large public, brokers have started to appear and they never stopped. Nowadays, literally hundreds of such brokers are operating and just waiting for you to open an account. Registration is free of charge and all you have to pay is some bank transaction fees (in some cases) and of course, the money you want to invest. Be careful though because not all of these brokers are trustworthy. We recommend you choose one of our Recommended Brokers or at least a regulated one. Also, before you venture into the binary options industry we advise you to read our articles on How To Choose Your Binary Options Broker and Binary Options Regulation – Everything You Need To Know.
When Can I Trade Binary Options?
Some markets are open for the entire 24 hours, 5 days out of 7 (the currency market is a great example) so you can trade whenever you feel like it, no matter the time zone you live in. However, stocks and indices have specific times when their markets are open so you will have to check with your broker to see what those times are. To make the story short, you can trade whenever the respective market is open
Who Trades Binary Options?
Newcomers to trading, ex FX traders, gamblers. Anyone can trade binary options. It’s not a discriminatory industry, meaning that you don’t have to have some special training or degree or stuff like that. If you are a plumber and today you decide you want to trade binary options, you can do it by tomorrow (or even the same day if you move fast). However, I wouldn’t recommend such a move because – just like almost everything else – binary options trading needs training. It’s better to spend some time educating yourself and then invest money, not the other way around. It’s all about training and because we know that, we’ve put together a huge Binary Options School – Free, of course!
Why Trading Binary Options?
Firstly, I would like to state strongly – Binary Options are based on speculation. Nothing is for sure and winning is a possibility not a certainty. Nevertheless, Binary Options trading definitely adds an extra dimension to speculation because there are so many trading tools and trading options that it is quite possible that one could make a correct speculation. Binary Options trading is mainly based on research and a certain amount of knowledge (about the markets and assets), but it is also strongly based on risk management. What I’m saying is that one is not required to become a Forex market guru to trade Binary Options, but he needs to be knowledgeable, alert and aware. To begin with, Binary Options require only a small level of investment but give a very rewarding level of return. Online platforms have made the trading of Binary Options easier because any trader across the globe can trade Binary Options and receive the needed information for trading. Making a few smart and profitable investments while losing some other minor investments could generate high profits in a short amount of time. Binary Options trading is breathtaking, profitable and fun. As the Binary Options industry is growing, trading has become more popular and far more advanced. Always keep in mind, however, the road for high profits starts with a trusted Binary Options Broker that fits your needs as a trader.
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