I was recently at a cocktail party having the regular run of the mill small talk that inevitably leads to the disclosure of investment portfolios. While everyone was discussing his or her latest investment success story I figured I would utilize this time to answer a question I had been pondering for the previous month. As the waiter circled around with our fourth round of champagne I asked, what I thought was a simple question, “So what are the best binary options brokers your firms use?” My question was quickly followed by the sound of crickets. I knew that all of their firms offered binary options, but what had never occurred to me was that they were only allowed to use one broker and therefore had never considered which broker was the best.
Let me back up and first introduce the readers who are not familiar with binary options. While the finance world is known for its cutthroat all-or-nothing approach, binary options take this philosophy to a new level. Literally known as “the all-or-nothing option”, binary options refer to a stock that offers only two possible outcomes. Usually dealing in a specified amount of an asset, binary stock options only offer all of the payout or nothing at all, depending on the stock’s value at an expiration date. Confused yet? I’ll break it down, as all financial transactions can be simplified (regardless of what your local investment banker tells you), with an example. Binary options are essentially bets, or guesses, to a stock’s value at a future date. Say you decide to buy a binary call-option on ABC Corporation’s stock struck at $200, with a $5,000 binary payoff. If, on the date of maturity, ABC Corporation’s stock is worth at least $200, you receive $5,000. On the other hand, if on the date of maturity the stock is worth less than $200, you receive nothing. Get it?
Okay, now that you understand how you can quickly make guaranteed money using binary options, it’s important to know who are the best brokers for betting successfully. There are three major firms that are best known for their ability to research trends and potential risk to provide the highest probability for success with binary options. TickTackTrade (My favorite) is known to give out a maximum 50% bonus, as opposed to its competition, which has a monetary maximum. In addition to its bonus Boss Capitol only requires a $200 deposit and pays you 85% of your payout. Cherry Trade is another firm dedicated to binary options; however, they only pay you 81% of your payout and max your bonus at $20,000. Redwood Options is the third most popular binary stockbroker that, like the other two options, only requires a $200 deposit, however they max out your bonus at $15,000 and pay you 81% of your payout. These are the categories you need to focus on when researching which binary stock option brokers are best for you. How much of your payout will you actually receive? These are the types of questions you want to ask firms before investing your money with them. Of course every case is different so you should do more research specific to your desired investment and outcome, but when people ask me what are the best binary options brokers, these are the three I recommend.
Binary options trading have been around for some time now; however it was only recently that it grew in popularity with fresh traders. While binary options are a new method of financial asset trading, the trading markets today have been flooded with wrong information and products on binary options.
To succeed at binary options, you don’t need the help of these products but should be able to estimate if an asset will go up or down in a given period of time. The wrong choice leads to your losing your investments but the right ones, gives you the desired profit.
Binary options today offer the easiest form of financial trading in the market where you can trade in currencies, indices, stocks and even commodities. So here are some tips to help you learn how to trade binary options.
- You need to first do some research on binary options trading. Binary options have a worldwide reach and are traded in European exchanges like EUREX and in US exchanges like the Chicago Board of Trade. You have to make your choice, and sign up to become a member of your chosen exchange.
- You then have to decide on the underlying asset you want to invest in. This should be done with after some research about things like the demand and need for the asset. The internet is a great place as it helps you figure charts and gives you financial news to help you make the right verdict.
- On choosing the underlying asset you want to invest in, you have to decide which type of option you want to purchase. You have 2 types of options in binary options trading; Call options and Put options. If you think the underlying asset will expire higher than the price you had purchased it for, you should place a Call option.
On the contrary, if you think the asset will expire below the original purchase price, you need to place a Put option. So if you think Apple is not doing well and may continue like this for some time, you could buy a Put option.
This puts you in a better option to earn if Apple drops below its original purchase price. Similarly if you heard that Barclays had a recent boom and may continue this way, just purchase a Call option thinking that the expiration time price will grow.
- All binary options have different expiry times ranging from hourly, daily, weekly and monthly contracts, and should be considered while trading as it improves your chances to earn. Read more about the 60 seconds binary options.
For example if you heard news at breakfast that the FTSE 100 had taken a fall, you may purchase a Put option on the FTSE 100 with a 1-hour expiration contract as you think things are unlikely to go the other way in an hour’s time.
With this, you learn how to trade binary options. Just remember that time is very important in binary options both while biding and using it as a tool. It is always better if you keep up with the latest financial news and the movements in the market as the information you gain here can make the difference between you earning or losing at binary options trading.
The Definition and Basics of Binary Options
What are binary options?
Binary options are a digital way of trading options whereby a trader earns either a fixed amount when the options expire or nothing at all. Whether a trader will earn money on the option depends on certain conditions which have to be met at the expiry. Binary options are one of the easiest trading products since the trader is already aware of the exact amount to be earned or lost should there be a win or a loss in the trade. Binary options are a high risk business which can be very exciting for risk takers while dangerous for risk averse traders. This is because with binary options, a trader can make an ample return on investment within an hour. However, the same hour can mean losing all the return on the investments if the binary options expire within an hour. Read some tips on how to trade binary options.
Binary options work through speculation. Understating how binary option work is very important in speculating the investment so as to make a good return on the investment. A trader purchases a contract on a primary asset and relies on speculations to forecast the fate of the value of the asset. Good prediction will result in an increase in value over the life of a contract. When the option matures or expires, a trader is said to be in-the-money if the value of the assets increases, while out-of-the-money should the value decrease.
A trader who is interested in binary options trading can find a binary options broker from their various websites and choose an interested asset. A contract on the asset will then be found and the trader can choose the purchase depending on how they speculate the options will perform at expiry. If a trader speculates that the value of the options to be purchased will increase at expiry, then a call option is purchased. On the other hand, a put option is purchased if a trader predicts that the option value will end lower.
What Is Binary Options Trading