How Binary Options Work:
Binary options are 1 of the most controversial trading instruments – for a reason:
On the one manus, they are super easy to trade and therefore perfect for beginners.
And they are perfect for traders with modest accounts because you can open up a binary options account with as picayune every bit $250.
But on the other mitt, there are some binary options brokers out in that location that are simply a scam. About of them are overseas, and when you lot wire money to them, y’all’ll never see it once again.
So allow’s have a closer wait at Binary Options and see if they are legit and if you tin really brand money with binary options.
In this article, yous’ll acquire…
- How binary options piece of work
- Can you lot really make money with binary options
- What are the best binary options brokers that are NOT a scam?
- Are binary options legit?
- Is binary options trading safe?
- And what is the all-time strategy for binary options?
Permit’s get started…
How Binary Options Work
Binary options are super easy to understand.
You just need to brand a decision if a sure market is in a higher place or below a sure toll past a certain time.
Allow me give you lot an example:
Permit’due south say you believe that Gold will close above $ane,700 past the end of the mean solar day.
And then y’all tin place a Binary Options trade: The price of a binary choice will be betwixt $0 and $100. And that’s the amount that you need to put on the table to place this bet.
Permit’southward say the price of the binary pick to bet on Gold being above $i,700 past the cease of the 24-hour interval, is $40.
When placing the trade, the broker takes $xl out of your account.
If by the stop of the day Gold closes in a higher place $1,700, you get $100 dorsum. So you put $40 in and yous become $100, i.e. your profit is $60.
If Gold closes below $i,700, and then you lot get nothing dorsum. And since the broker took $40 out of your account, and y’all get $0 back, your loss is $xl.
Here’due south the cool thing:
Binary options are available for a wide variety of underlying markets:
- Major
indices
like the Dow Jones, Due south&P 500, Nasdaq, … - Major
commodities
like Crude Oil, Aureate, Silvery, … - Major
currencies
like EUR/USD, USD/JPY, GBP/USD, …
… AND they elapse daily or even hourly!
And so if you lot don’t desire to expect until the stop of the day, you lot tin trade a binary option that expires in the next hour.
All you need to do is decide whether a sure market place is closing above or below a sure price within the next 60 minutes!
As you can run across, the possibilities are (almost) endless.
And then the next question is…
Can You Actually Make Money with Binary Options?
IF yous trade with a reputable broker: Aye.
Nosotros volition talk about the best binary options brokers that are Non a scam in a few moments, but let’s talk about how to make money with Binary Options first:
Here are the three things you need to know:
- Is the marketplace more likely to go upwards or down?
- Will a market place close above or below a certain level?
- What’s the maximum cost you’re willing to bet?
I will evidence you a elementary trading strategy for Binary Options in the next article.
Merely before I show you the strategy, let’due south first talk about…
What Are The Best Binary Selection Brokers?
There are a lot of fraudulent binary options brokers and scammers out in that location, and yous need to exist conscientious.
The only “broker” that I would ever trust is the
North American Derivatives Exchange (NADEX).
Nadex is 100% legitimate and is designated past the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market and Derivatives Clearing Organisation.
The CFTC is a U.S. government agency whose mission is
“to foster open up, transparent, competitive, and financially sound markets,”
to
“avoid systemic risk”
and
“to protect market users and their funds from fraud, manipulation, and abusive practices.”
That’southward a mouthful for saying:
Nadex is a 100% legitimate and regulated substitution.
And the best:
They allow customers to open an account straight with them!
Then y’all’re cutting out the middle man, which means lower commissions for you!
Talking nearly commission…
I really like Nadex’s commission structure:
It’s simply $1 to open a trade, and they Only accuse you another $1 to close the trade if you make coin. If y’all lose money, they don’t charge yous a commission to close the trade. How awesome is that?
Long story short: If you want to trade Binary Options, merchandise them at Nadex!
Are Binary Options Legit?
As stated earlier, at that place are many unregulated brokers who just take the customer’south coin and never return it. Most of these brokers are operating offshore in countries that have very few or no regulations.
In the US, brokers and exchanges are VERY regulated. Equally of the moment, NADEX is ane of the few licensed companies in the U.Due south. that is allowed to offering Binary Options Trading.
Binary options are legal and available to merchandise in the United states, only simply on a CFTC-regulated United States exchange, which – once more – is NADEX.
In a nutshell: As long as you merchandise Binary Options on NADEX, it’s legit and legal.
This leads the states to the next question:
Is Binary Options Trading Safe?
We already talked about the regulations, and then we don’t need to cover this again.
Every bit a trading vehicle, Binary Options are very condom since they are non leveraged.
This means that yous can not lose more money than you accept in your business relationship.
Hither’s an instance of how binary options work:
If you have $500 in your account, and you desire to put on a trade in which you risk $50, NADEX will automatically reserve $50 from your funds.
When the social club is filled, these $fifty volition automatically be deducted from your business relationship. And so your balance is at present $450.
If y’all were right, NADEX will requite you $100 dorsum as soon equally the markets close. In this case, your account balance will jump to $550, i.e. you made $fifty.
Because of this mechanism, it’southward incommunicable for you to lose more coin than you have in your business relationship.
As you can come across, trading Binary Options is safe.
What Is The Best Strategy For Binary Options?
The best strategy for Binary Options is a strategy that makes it easy for you to pick the direction of the marketplace.
Afterward all, in order to make money with Binary Options, you need to know…
- Is the market more likely to go up or down?
- Will a market shut higher up or beneath a certain level?
- What’southward the maximum price y’all’re willing to bet?
Actually, since this commodity is getting pretty long, I’ll stop correct here and will write another commodity on a trading strategy for Binary Options.
Source: https://www.rockwelltrading.com/articles/coffee-with-markus/how-binary-options-work/
