Binary Option Trading in 2020

Binary options are very simple, they are basically bets on whether a specific stock commodity or currency will go up or down. If you think the price will go up, you place a call. If you think the price will go down, you buy a put…

I’ve been trading binary options since January 2013. This business is very unique as it is very simple to understand and return is massive and sometime about 500% on your initial investment (depends on your broker). To trade there are two basic types of binary options. The first, called a ‘call’, is bought when the trader expects the price of that option’s underlying asset to go up. If a given trader expects the price of that option’s underlying asset to fall, they would buy a ‘put’. With each binary option, there are two key pieces of information to remember. First is the strike price. This price level determines whether an option expires in the money or out of the money. Second is the date and time of expiry. With binary options, expiration can be as short as a few minutes and as long as several months.

Things to consider before choosing option broker.

Till today option brokers are not regulated but some brokers are making efforts to be regulated by Cyprus Securities and Exchange Commission. Only one broker is regulated by ASIC but my personal experience with them is not very good. You could search about them online. Please do not invest your money if your broker claims these following things :

• We are market makers, Some option brokers claims to be Market maker which is totally wrong and misleading information to traders. If they claim to buy binaries from bank and sell them to you in which they get commission. No bank offers binary trading except some bank offers vanilla option but they are totally different from binary trading as their time period is monthly or at least weekly.
• If they claim to be regulated by National Swiss Bank — SNB is not a regulating agency for option brokers.
• If they claim to be regulated by Reuters. WRONG! Reuters provides platform for interbank trading as well as provides real time market data feed for various assets and is not a regulating agency.

Some broker write this statement “option price/quotes that is offered by us is not necessarily the real time of the underlying asset but rather the price that this broker is willing to offer the relevant option” — This statement means that you may or may not get fair market price during expiry, fair market price is very important because you may lose a lot of money with just with 0.1 pip although the real market price was in your favor.

Conclusion: I have personally tried 5 different brokers and have concluded that till now Option Brokers don’t offer transparency, fair option expiry price as well as funds security. You can pick different brokers and compare their expiry price and all of them would be having different expiry rates, even though most of them gets their feed from Thompson Reuters. We as traders have to wait little more time for this business to develop to a point where we have sense of security and freedom to trade without fear.

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