Canadas Binary Options Guide
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We provide a complete binary options trading guide for Canadian investors. This guide includes news & reviews on the best binary options brokers serving Canada, taxes, education & strategies.
Learn More About Binary Options in Canada
Many people havent yet heard of binary options trading, and thats understandable because until a few years ago it was considered an exotic option. It wasnt until binary options was taken down from the main exchanges that individual binary options brokers popped up realizing that traders find binary options easy to understand and use. Because theyre mostly unregulated, the question of binary options legality came up with traders and financial administrations of countries. Cyprus has been a leader in regulating the industry, but not all brokers regulated there are good, and not all good brokers are based there. This is the main reason we have studied the various binary options brokers in canada ourselves and chosen those we feel are the best fit for our visitors.
Binary options companies often offer bonuses or special offers in order to entice users to join, trade, and keep trading. Theyre also often used as a way to lock-in traders to force a certain number of trades before a withdrawal can happen. Thats why we review the bonus offers to canadian binary options traders as a way to diagnose which bonuses are worth taking and which are worth leaving behind. Its completely reasonable to say no to a bonus offer in order to ensure your ability to cash-out, but sometimes theyre just too good and it would be leaving money on the table not to use them.
We also address taxes for Canadians trading binary options, as due to the unregulated nature of the market, traders may find themselves with questions only a good accountant can provide. Its important to designate whether or not binary options are considered gambling, as to how you as a Canadian should treat them for tax purposes.
Why Trade Binary Options?
To our knowledge, no other investment option provides the speed of return of Binary Options trading. With trades maturing in as little as 60 seconds from execution and returning 85% on your investment, binary options can be a highly profitable part of your trading strategy. Theyre high risk, high reward investments, and, in our opinion should be used in moderation as part of a larger risk-profiled strategy.
Furthermore, choosing the right broker to trade with makes all the difference in your binary options trading. Issues such as whether the broker provides knowledgeable advisors, whether their trading bonuses are worth taking, and whether the brokers pay you back on-time and as-expected is important to consider. Weve done the legwork for our readers in researching and speaking with the binary options brokers listed on the website, and we know that in recommending Canadian investors trade with certain brokers, we leave our readers in good hands.
Can I Get Rich Quick Trading This?
No, not if youre trading intelligently. Because binary options are traded rapidly and have large payouts per-trade, some people think its a path to quick profits. We disagree. Mathematically speaking, binary options are win/loss events, right? Well, if youre a really good trader, you might be able to win 65% of your trades. That still means that almost 1/3 of the time, youre going to choose incorrectly. And, unlike traditional stock/options trading, there is no room in binary trading to let winners run and cut losers. So yes, one trade is highly profitable, but when you make 1000 trades the law of averages comes into play.
That is obviously not to say that we dont recommend binary options trading, we do recommend it, but it is not a get rich quick scheme. Be very wary of any broker who tells you youre going to be rich doing this.
How much should I deposit?
This depends on you as an investor. Binary options are not risk-less investments, and their high alpha value means this is going to be some of your highest risk and highest reward investments. We recommend using no more than 10% of your total investing portfolio to trade these. Do not invest in highly volatile things with money you need for your expenses, do not listen to any broker who convinces you thats ok. You need to use free money which you dedicate to investing and learning, and have to be willing to lose it if that is the case. If your starting amount is $250, so be it. If its $25,000, so be it. Just be aware that this game moves quickly.
Are binary options different than put and call options?
Yes, very different. Traditional put and call options are contracts written on underlying shares of stock (or other asset). Effectively theyre a promise to do something (either buy or sell) those underlying options and their value fluctuates with the asset. Binary options are an up/down wager on the price of an underlying asset at a certain time. The value of the option is fixed, the underlying value is the trigger. So, where in a traditional put/call option, a price swing of $1 on the underlying asset might swing your value 40%, in a binary option all that matters is whether the $1 swing in the underlying is in line with your wager (above or below the strike price).