Binary options trading is a simple way to make money online, The word “binary” means “having two parts” and trading binary options typically involve only two investment possibilities from which to choose. When you invest in a binary option, you will be paid a fixed amount of money at the end of the time period prescribed in the investment agreement … or you lose all the money you invested in the binary option. “ForexSQ” binary options trading experts team confuted this article for you to know what is binary trading options and how to trade binary options in forex market. You will also know about how to open account with the best binary option trading brokers.
What Is Binary Options Trading
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When trading binary options in financial markets, you are basically predicting whether the value of the asset (which is the subject of the binary option) will increase in value or decrease in value during a certain period of time.
In binary option trading, an investor needs only to predict whether the price of the asset will rise or fall. If an investor correctly predicts the direction of fluctuation (up or down) of the asset’s price, he or she is paid a fixed return on the investment no matter how much the asset’s price fluctuates. In other words, the range of fluctuation is irrelevant; investors are paid a predetermined, fixed return, no matter how much the price rises or falls. If the fluctuation is incorrectly predicted, the investor loses all the money he invested.
If you think the price of the asset will go up it’s called a “call” option. If you think the price will go down, it’s called a “put” option.
For a “call” to make money the asset’s price must be above the strike price (the price at which the investor’s call or put option can be exercised) at the end of the prescribed time period.
For example, if an investor purchases a cash or nothing binary option on ABC Company for $100 with a binary payoff of $1000, the asset’s price at the end of the time period prescribed in the binary option must be above $100. If it is above that amount, the investor receives a payoff of $1000. If the ending price is below that amount, the investor loses his money.
For a “put” option to make money the asset’s price must be below the strike price at the end of the prescribed period of time and losses are realized when the price is not below the strike price.
These “call” and “put” options are considered “plain vanilla,” as explained in more detail below.
The underlying asset, time frame and “strike” price are outlined upfront in the binary options trading agreement.
Binary options trading are available in a large and diverse range of assets, including, stocks (or shares), commodities, foreign currency exchanges (forex) and more.
Investors like binary options trading because of the upfront transparency of the investment. When investing in binary options trading , the investor receives detailed information about eventual profits or losses, which means he or she knows exactly how much money will be gained or lost before actually entering into a binary option investment.
What is a Plain Vanilla Option?
Plain vanilla refers to the most basic version of any tradeable asset or financial instrument. Vanilla options can be applied to a certain category of financial instruments (shares, bonds, etc.) or it can be applied to trading strategies. Vanilla options in binary trading involve one expiration date and a specific price of the asset and no more. Vanilla options are the opposite of “exotic” options.
What is an Exotic Option?
Whereas vanilla options involve the most basic version of an asset or mode of thinking, exotic options are those that add an additional component to the transaction that makes the security more complex.
Exotic options typically vary from traditional American or European options in terms of either the underlying asset or the way an investor’s return is calculated at the end of the option period. Exotic options are much more complicated than the “call” and “put” choices of plain vanilla options.
Options can be categorized based on their expiration cycles, the underlying security which is the subject of the option or the method in which they are traded.
How to Begin Trading Binary Options
As with any other investment that could cost you money in the end, there are things to carefully consider before entering into any binary option trading agreement.
The first thing, of course, is deciding what asset in which to invest with a binary option. You should also determine the price trends of that asset, the possibilities of reversing those trends and the date at which the option expires.
When choosing an asset in which to invest, consider those areas that interest you. If you have an interest in precious metals like gold, you may want to invest in a binary option in the gold market. It’s always advisable to glean as much knowledge as possible before entering into any investment vehicle that could possibly negatively impact your investment portfolio and financial bottom line.
What Assets Can be Traded in Binary Options?
As mentioned above, there is a wide range of assets in which to trade binary options.
Stocks – You can invest in binary options in over 50 of the world’s biggest and most successful companies in a variety of industries, including Coca Cola, Google and more.
Commodities – Binary options are available in the commodities market, including precious metals like gold and silver, petroleum products (oil), as well as agricultural commodities such as coffee and corn.
FX Currency Exchanges (forex) — Binary options are available in many combinations of the major currencies (most traded) in the world like the U.S., Canadian and Australian Dollars, as well as the Euro, Japanese Yen and more.
Indices – You can also invest in binary options involving indices that track trends in financial markets like the Dow Jones, NASDAQ, FTSE, Nikkei and many more.
Binary Options Brokers In UK, Europe, Asia, South Africa
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As with any other investment, you will need to open a trading account and work with a properly licensed broker in order to conduct trading in the binary options market. Before finalizing your choice of a broker, do as much research as possible on the trading history of that broker or the brokerage firm that employs him or her. Before signing any agreement you should carefully read the fine print looking for hidden costs and obligations and be sure you understand all the ramifications of winning and losing binary option strategies.
Fxpro
Fxpro Forex Broker Founded in 2006, London-based FXPro is an online broker offering Forex trading along with binary options. The MT4, MetaTrader5 and cTrader online trading platforms are available.
Plus500
Plus500 is a company providing online trading services to retail customers. Plus500 broker provides binary options trading to all traders around the world except U.S citizens, The company was founded in 2008 and provides trading in CFDs on a range of financial markets.
IG Group
IG Group is a UK-based company providing trading in financial derivatives such as binary options, contracts for difference and financial spread betting and, as of 2014, stockbroking to retail traders.
While the majority of the IG Group’s activities are based in the UK, the company has expanded internationally. IG Markets is the oldest broker in the best binary options trading brokers list.
CMC Markets
CMC Markets is a UK-based financial derivatives dealer. The company offers online trading in spread betting, contracts for difference and foreign exchange across world markets.
24Option
24option is one of the world’s leading binary options trading platforms. Trade binary options on 60-second options of commodities, indices ,stocks and Forex.
IQ Option
IQ Option broker is at present relatively popular throughout Southwest Asia, Europe and South America.The parent company in Europe released “IQ option robot” which is too famous for automated trading.
HYCM
HYCM previously known as HY Markets broker is headquartered in London and is authorized and regulated by the Financial Conduct Authority of the United Kingdom.
eToro
eToro is a social trading and multi asset brokerage company that has registered offices in Cyprus, Israel and the United Kingdom.
ETX Capital
ETX Capital broker provides Forex, Spread betting and CFD trading options for all types of investors – from tools and education to trading.
Markets.com
Markets.com broker offers seamless trading of over 300 trading assets. Trade stock, indices, currency, Binary options and CFDs with zero commission or fees on our top notch trading platforms, mobile or web.
AvaTrade
AvaTrade was founded in 2006 in Dublin, Ireland and is licensed and fully regulated in the EU and BVI, as well as Australia, Japan and South Africa.
XM.com
The XM.com CFD brokerwas established in 2009 in the Republic of Cyprus using the nameTrading Point of Financial Instruments Ltd. The broker is regulated by CySEC as well as the UK’s Financial Services Authority (FSA).
Alpari
Alpari Ltd was created in Russia in 1998 butmoved its headquarters to the UK where it is registered and strictly regulated by the Financial Securities Authority (FSA), Alpari UK hasmerged with Alpari Global andAlpari US is registered with and overseen by a number of regulatory agencies.
FXTM
FXTM is an acronym for ForexTime.com, TheFXTMforex brokeris owned and operated by its holding company FT Global Services Ltd and is based in Cyprus, Belize and Europe’s trading capital of London, UK.
EasyMarkets
TheeasyMarkets broker is the result of the re-branding of “easy forex“, the name under which this broker was establishedin 2003.The easyMarkets firm is headquartered in LimassolCyprus and maintains satellite offices in London UK, Sydney Australia and Warsaw Poland.
London Capital Group
London Capital Group Ltdwas founded in 1996 in the United Kingdom and regulated by the Financial Conduct Authority (FCA) of the UK. LCG trading began offering capital spreads in 2003 and is one of the leading financial services firms in the UK offeringa wide range of investment assets that include Contracts for Difference (CFDs), stocks, indices,major currency pairs, binary options, soft commodities, oil and precious metals.
Fxstay
Fxstay broker team provide professional Forex managed accounts service to their clients.
Fxstay team provide VIP managed accounts use dedicate teams which include international traders to Managed investors account with low risk. Fxstay is one of the best binary broker in the world specialized only in managed accounts service.
Binary Options Broker In Australia
Pepperstone broker is founded in Australia, Melbourne and has offices in USA, Dallas and China, Shanghai.
Binary Options Bank In Denmark
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Saxo Bank is a Danish investment bank. It was founded as a brokerage firm in 1992. SaxoBank is one of the best binary options broker in the world.
Saxo bank offers trading through its online platform SaxoTrader in Forex, binary options, stocks, CFDs, futures, funds, bonds and futures spreads. Private wealth management services are also offered.
Now you know how to choose the best binary options brokers in the world but continue reading to know about swiss brokers.
Binary Options Banks in Swiss
Dukascopy Bank
Dukascopy Bank SA is known for its transparency in its Swiss SWFX market place. In June 2011, the product is officially referenced on Dukascopy Bank‘s official web site.
Swissquote Bank
The Swissquote Bank also has offices in Zurich, Bern, Dubai, Malta, London and Hong Kong. The Group has 545 employees.
Binary Options Brokers In U.S.
Forex.com
The Forex.com broker Owned by parent company GAIN Capital . Operating since 1999, FOREX.com was a first mover in bringing currency markets to the retail trader.
FXCM
Forex Capital Markets, better known as FXCM, is an online broker based in the United States. Outside the US, FXCM also providesbinary options and trading in contract for difference (CFDs) on major indices and commodities such as gold and crude oil.
Oanda
OANDA broker is a Canadian-based company, In 1996, OANDA Corporation, the US subsidiary, was incorporated in the state of Delaware.
Other Binary Options Brokers
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24option – HotForex – InstaForex – GCI Trading – Fxopen – Trade360 – Interactive Brokers – Tradeo – IQ option – Z.com – TradeKing – OptionsHouse – Capital One Investing – TD Ameritrade – eTrade – Charles Schwab – Fidelity –Merrill Edge – Exness –
Differences Between U.S. and UK Binary Options Trading
Binary options outside the United States typically have fixed payouts and risks and trades are not conducted on an exchange, but through individual brokers. These brokers make money based on the discrepancy between what they paid out on losing trades and what they collected from winning trades.
These foreign binary options are meant to be an “all or nothing” system of payouts on the date at which the option expires.
Unless a foreign broker is properly registered with a U.S. regulatory agency such as the Securities and Exchange Commission (SEC), they are not permitted to solicit binary option trading from U.S. residents.
As you can see, there are a lot of things to consider when entering into a binary option trading agreement.
The professional investors at ForexSQ are always available to answer any questions you may have regarding binary options or any other trading platform.
What Is Binary Trading Options By ForexSQ Infographic Team
The professional traders at ForexSQ have created amazing binary options Infographic for beginners don’t know what is binary options trading, I hope you like it and share it with your peers.
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