Binary Options Brokers List
FAQ About The Binary Options Brokers List
What is this binary options brokers list all about?
With a typical securities trade, the investor purchases it at a certain price and attempts to sell it after that price has appreciated, realizing the difference between his purchase price and sale price as a profit. Or, in the case of a short sell, the investor sells a borrowed security and then attempts to purchase the security back once the price has dropped to repay what he borrowed.
In either case, the amount of profit (or loss) to the trader is equal to the difference between the purchase price and the sale price, fees and or commissions payable to the broker or brokerage house notwithstanding. When the price in a security makes a big jump or descent between the purchase and the sale, the trader realizes a big profit or loss. When the price difference is small, as is the profit or loss.
Binary options work differently
With a binary option, a trader places a fixed bet on which way a particular security (or commodity, currency, etc.) is going to move: up or down. Therefore, there are only two outcomes of a binary trade: a total win or a total loss. Hence the name binary, which means composed of two things.
Here is an example of how it works
Lets say the price of a security is sitting at $1,500. A trader who is confident that the price will rise would purchase what is known as a call, or a bet on the price rising to a certain level, known as the strike price, by a certain date or time, known as the expiry. Also, lets say he purchases the call for $100. So, if the strike price is $1,540 and the expiry is six hours from now, the trader wins the bet if the price exceeds $1,540 in six hours. He wins $100, the amount for which he purchased the call, minus fees usually amounting to 30 percent, giving him a net gain on the trade of $70. However, if the price after six hours is below $1,540, he loses his full $100. If its $1,540 on the nose, its known as a push, and typically he will receive his $100 back, although some brokerage houses deduct a small fee.
Can traders only bet on rising prices at companies from the binary options brokers list?
A binary options trade in which the investor believes the price of a security or other asset will rise is known as a call. When a call is purchased, the price must rise to a certain strike level by the expiry date or time for the trader to win the trade. However, it is also possible to make a binary options trade on an asset you predict will fall in value. In order to bet on an asset dropping in price to a certain level, instead of a call, you would purchase what is known as a put. It works the same way as a call, except in reverse. There is a strike price and an expiry date or time. Therefore, if the price of an asset that an investor thinks is going to drop currently sits at a price of $1,000, and the strike price and expiry time on the push are $950 and six hours from now, that means the price of the asset must be less than $950 in six hours for the trader to win on his bet. If it is above that level, the trader loses the entire purchase price of the put. In the case of a win, his winnings equal his purchase minus fees, which generally run about 30 percent. In both the case of a call and a put, the object is very simple: The trader is betting on the direction in which the price will move. Beyond the requirement that it move beyond the strike level by the expiry, the degree or rapidity of movement is irrelevant. Meaning, as long as the asset in the example above drops below $950 at expiry, it doesnt matter if it is at $949 or $300 the trader wins the same amount in either scenario.
What are the advantages of binary options trading over traditional trading?
For the right trader, there are a plethora of advantages to learning, mastering, and focusing on binary options trading rather than traditional trading. The first of these advantages is simplicity. As a binary options trader, success is only dependent on the timely identification of sweeping directional movements rather than intricate market vacillations throughout the day. While any trade in any market ultimately results in one of two broad outcomes a win or a loss with most types of trading, there are an infinite number of degrees and variations to either scenario. With binary options trading, that is not the case. With every trade you make, you know exactly how much youll win on a win and how much youll lose on a loss. Another advantage of binary options trading is limited risk. Because youre only trading a fixed amount, you can limit your trades to what you know you can afford to lose. There is no risk of getting hammered on a bad trade if the market makes a rapid, significant, unexpected move in an unfavorable direction. In traditional trading, short sellers in particular have been known to lose their shirts when the price of an asset surprisingly makes a big jump and they are forced it purchase it at an exorbitant price to cover their short. Unlike with traditional trading, you do not need to invest a lot of money in binary options to see material returns. Also, you can see returns a lot faster: Expiry times can be as short as a few minutes, so if you know what youre doing, you can realize numerous returns of 70% or more within a single day, whereas traditional securities need to be held much longer to see appreciable gains. Trading binary options offers convenience as well. Because you can trade many different assets across the globe at anytime of day or night, and because binary options brokers offer trading platforms that are extremely accessible anywhere you have an internet connection, you will never be constrained by market hours or technology when trading binary options. Finally, binary options trading offers the advantage of having profit potential during good and bad times. Your job as a trader is to figure out in which direction the price is moving (or, more accurately, is going to move in the near future) and trade in that direction. Whether that direction happens to be up or down is immaterial; a win is a win either way.
What kinds of options can I trade at binary options brokers on this list?
One of the biggest benefits of binary options trading is that you arent restricted to trading certain stocks, indexes, or markets. There is an almost limitless variety of asset spanning the entire globe that are ripe for binary options trading. Which ones you choose to trade depend on your comfort level with each. It is recommended that anyone interested in binary options trading or any kind of trading for that matter extensively study any and all markets they are considering trading before going live. You will probably find that some markets do not interest you, or they have certain intricacies which you find confusing or difficult to understand. That is fine. There are enough options out there that just about anyone can find his or her niche. Lots of people start out by trading individual stocks, often because that is what they traded using more traditional methods. Trading individual stocks means youre placing options bets on specific companies such as Google, Facebook, McDonalds, or any number of smaller companies. The possibilities are almost endless. If individual stocks do not interest you or, like many traders, you find it overwhelming to scour the vast market of them and pick out the ones you feel comfortable trading, you can do what a lot of binary options traders do and trade entire indexes, such as the Dow Jones, the NASDAQ. By doing this, you can follow the market as a whole, and when you get a beat on which direction youre confident it will move during a certain time period, you can confidently exercise option trades. With binary options trading, you certainly are not limited to stocks. Another option is currency pairs, such as the U. S. dollar versus the Euro, or the Japanese Yen versus the British pound. Betting on currency pairs means betting which direction the value of one currency will move relative to the other. So if you think the U. S. dollar is going to gain value relative to the Euro, you simply purchase a call in that direction. And then there are commodities, such as crude oil, gold, silver, and platinum. As with stocks, indexes, or currency pairs, you simply make bets on the directional movement of the value of a commodity.
Are there minimum and or maximum trade amounts with binary options trading?
Another beauty of binary options trading is that you are afforded a lot of flexibility when it comes to how much money you want to trade. Unlike a lot of online equities brokerage houses, binary options brokers almost never require you to have a large starting balance in your trading amount before you are able to go live. You also wont find a lot of minimum trade amounts that are prohibitively high for a small-time broker. As for maximums, theyre up there. Even high rollers will have no trouble finding brokerage houses which offer them plenty of room to make big bets. As is the case with a lot of the intricacies of binary options trading, exact trade minimums and maximums will vary from broker to broker. There are brokers who allow traders to make trades for as little as one dollar. For a true newbie to the game, or for someone who is risk-averse and doesnt want to put himself in the position to lose much of anything until he is completely confident he has mastered a winning system, this type of brokerage house would be the ideal place to start. Others have slightly higher minimum trade amounts, such as $10, $20, or $25. The brokerage houses who cater more to people making small trades are more likely to place their maximums as a lower level, such as $1,000 or $2,500. Because their customers are typically less experienced and or less capitalized, this mitigates the risk of losing large amounts of money on trades that dont pan out. However, there are plenty of brokers out there offering much higher trade maximums, even as much as $20,000 on a single trade. It is worth noting that trade maximums are like credit card limits: Just because you are able to obtain a high one doesnt mean you should max it out without a good reason. Most traders who utilize $20,000 maximum trades have a lot of experience, are using a system that has been perfected over a long period of time, and put a lot of deliberation and precise calculation into those big trades.
Are there any restrictions on who can trade binary options?
This is yet another big benefit of binary options trading compared with other, more traditional markets. The barriers to entry are much lower. In a country such as the United States, the only overarching restriction placed on binary options traders is that they must be at least 18 years of age. Other specific restrictions may exist from country to country, but for the most part, binary options is a market open to just about anyone. This includes people who may not have a lot of capital to fund their trading accounts; other markets essentially place de facto restrictions on these people by requiring oppressively high initial trading account balances. With binary options trading, this is not the case, as there are numerous brokerage houses on the market that will allow a trader to get started with as little as $100 in his trading account. Beyond that, binary options brokers are not known for placing many restrictions on who can trade with them. Traders who have been sanctioned by a regulatory body in the past may have issues getting approved, and this can vary from broker to broker, but if you are over 18 and have an uncheckered financial past, you should have no issues getting started with binary options trading.
What kinds of things should I be looking for when selecting binary options brokers from this list?
There is no shortage of options out there for someone looking for a brokerage house to trade binary options. There are dozens upon dozens of choices, all of which offer many perks and benefits to attract new traders.
Which of these brokers is right for you depends entirely on your needs, desires, and goals. Different binary options brokers cater to different types of traders.
For example, some are more geared toward beginners and those who may need more hand-holding in the beginning. Therefore, they offer more simplified and user-friendly trading platforms, possibly less trading options so not to confuse or overwhelm a new or inexperienced trader, as well as videos, webinars, live trading demos, and other learning materials.
Some will even give you free trading courses, e-books, and even one-on-one mentoring as a perk for signing up with them. Often, these are the same brokerage houses which allow low initial trading account deposits (such as $100) as well as very low trading minimums (such as $1).
At the other end of the spectrum sit the binary options traders which cater to the more experienced, those who dont need as much guidance or direction and would rather have the freedom and ability to trade a lot of markets with a lot of money.
These brokerage houses have trading platforms that are more complex and often require more technical knowledge, but for an experienced user, they are also more versatile and offer more advanced capabilities.
Another big selling point for binary options brokers that cater to more experienced traders is that they usually place fewer limitations on which types of assets or markets can be traded.
If youre an experienced trader who likes to trade across a wide swath of asset types and markets, and youre a fast learner when it comes to advanced trading platforms, this type of broker may be more your style.
Instead of guidance, direction, and hand-holding, youll receive the freedom and the flexibility to trade as you see fit.
What are the steps to getting started trading binary options?
In order to maximize your chances of success in binary options trading, there are a few steps that you should follow, and it is important to follow them in the correct order. The first step is to educate yourself on binary options trading by learning the specifics of how it works as well as familiarizing yourself with the different assets and indexes you have the ability to trade. This will help you narrow down where you feel comfortable trading, and from that point you can focus on those individual assets or indexes and soak up as much knowledge as you can about all their intricacies as well as current market conditions and trends. Once you feel you have enough knowledge to begin making trades with confidence, the next step is to make a list of brokers youre considering doing business with and then comparing them to see which one is the best fit for you. This can be accomplished by knowing exactly what is important to you in a broker whether it is training, a user-friendly platform, broad selections of markets or indexes, or certain trading minimums and or maximums and reviewing what each of the ones on your list has to offer. Then make your selection accordingly. Once you have selected a broker with which you feel comfortable trading, the next step is to register with that broker and set up and fund a trading account. Signing up with a broker should be free, and a trading account depending on your broker can be funded with as little as $100. Most broker sites are good about walking you step-by-step through the sign-up and funding process, and many offer live chat or phone assistance if you get stuck at any point. Once you are registered with a broker and your account is funded, you can start trading live. This is done through your brokers trading platform. Once you log in, you will be able to select a financial asset to trade, choose the direction in which you think it will move, review the strike price and expiry time or date, decide for how much you want to purchase the call or put, and then execute your order. From that point, its a simple waiting game from the time of your purchase until the expiry time to see if your asset landed in the money (meaning above the strike price for calls or below it for puts).
How risky is binary options trading compared to traditional trading?
There is risk inherent in any type of asset trading. This includes both traditional trading and options trading, including binary options. It is difficult to quantify which type of training carries more inherent risk; however, what can be put forth with certainty is that the types of risks involved with each type of trading are different. Traditional asset trading can be very risky in that they frequently involve leveraged products. This means that a trader has the potential to lose even more money potentially by a large amount than what he laid out to begin with. With binary options trading, this is not an issue. Because youre simply making an educated bet as to which direction the price of an asset will move, and youre spending a fixed amount of money on that bet, you will never lose any more on a trade than the amount of your bet. With that said, its also important to keep in mind that with traditional trading, there are degrees of losses, so if an asset on which you take a long position only declines a small amount in price, you as a trader do not lose a large percentage of your investment. In contrast, with binary options trading, a losing trade is tantamount to a total loss. Some brokers will mitigate this loss by giving you a small percentage of your money back usually between 10 and 20 percent on a bad trade; however, the ones that do this almost invariably compensate for it on their end by paying out less on winning trades. It is a matter of personal preference whether or not you feel it is worth it to accept less money on winners in exchange for not forfeiting your entire trade amount in the case of a loser. Finally, it is worth noting that in any type of trading action, be it traditional or options, the amount of inherent risk is inversely proportional with the skill, knowledge, experience, and prudence of the trader. The best way to minimize your risk of loss permanently and in any market condition is to become a true student of trading and to never stop perfecting your craft.
Are companies on this binary options brokers list in the gambling industry?
Many people equate binary options trading to gambling because the object is to bet on which direction an asset will move.
If it moves in the direction you picked, you win the bet and double your money (minus fees). If it moves in the other direction, you lose the bet and your money. Therefore, it is easy to draw parallels to other forms of established gambling, such as playing roulette and placing your bet on red or black. With that said, there are major distinctions between binary options trading and true gambling. When playing a casino game such as roulette, not only do you have zero control over the outcome of a spin, but there is no way to even make an educated guess as to where the ball will land.
For example, if the ball has landed on black for the last seven rolls, the chances of it landing on black for the subsequent roll is 50 percent (actually, it is slightly lower, due to the presence of those annoying green zeroes that tilt the odds in the houses favor).
If, on the other hand, it has landed on red for the last seven rolls, the chances of it landing on black the next time, once again, is just under 50 percent. There is no way to use trends to make an educated prediction because pure randomness defines each spin of the wheel.
With binary options trading, skilled traders are able to use current trends, market data, and current events to make educated and confident predictions about the impending movement of an asset price. Obviously, there is still some chance involved with any trade, as asset markets are well known to be unpredictable. However, this is far different from placing a bet on something that is tantamount to the flip of a coin.
Therefore, the most accurate answer to the question, Is binary options trading gambling? is that the more educated a trader is, and the more prudently he sticks to a proven system, the less binary options trading is similar to gambling. A person who blindly bets on binary options without doing any research is a gambler. But a person who follows the markets and trend lines and executes trades using a surgeons precision is a true trader.