The first time I heard about Binary Options, it went like this.
Friend: Where do you think Oil is going in the next 60 seconds, up or down?
Me: I don’t know…. UP.
Friend: Thanks, I just made $70.
Me: What do you mean?
Friend: Well I bought a binary call option and I make over 73% return just by picking up or down.
Me: It is that easy?
Friend: Yup, Just Like That!
What are binary options?
Binary options are just like stock market options, meaning they expire after a certain amount of time, however, the return is a pre determined amount. When you trade binary options, you choose up or down and the time frame. If you are correct with the direction of the stock / underlying asset then you make money. It is as easy as playing black or red in roulette.
Are Binary Options good for inexperienced traders?
Yes and No! Binary option trading platforms / websites are made for newbie traders with their intuitive design and user friendliness. They also offer online training, and for large depositors they will assign your a private broker to help you place trades on the system.
The problem with binary option trading is that it is very different from stock market long term investing. Binary options expire rapidly and not only must you predict the correct direction of the movement, you must also pick the time frame of the assets movement.
Who regulates binary option brokers?
The largest licensee and regulator of binary option brokers is the Cyprus Securities and Exchange Commission (CySEC). Trader accounts in regulated brokers are covered by up to €20,000. Cyprus is an EU member country which means their licensing of a broker makes that broker licensed in EU member states. This is part of the MiFID agreement. Visit CySEC here.
How much do I need to trade binary options?
Most brokers have a minimum deposit required to open a trading account. Some brokers only require $100, others require up to $500. Have a look at how to compare brokers. Once you open account with a broker, then you can place binary option trades for as little as $1 to as high as $50k for each trade.
Which Binary Option Broker Should I Use?
That all depends on where you live and what type of trading you plan on doing. If you are located in the United States or Canada, there are some brokers who will not accept you as a client. If your native language is not English you will probably want to find a broker that has a site in your native tongue.
Brokers periodically offer specials and promotions that may be worth taking advantage of. We encourage you to read our continuous coverage of regulated binary options brokers, to see who is regulated.
What are the trading times for Binary Option?
Trading times for binary options depends on the specific asset in question but are always connected to the official trading hours of the various financial exchanges. Binary options on US Stocks are available from 9:30am – 4:00pm EST. Binary options on commodities like oil and gas trade based on the Globex hours from 8:00am – 1:30pm CST and binary options on currencies trade 24 hours a day except Saturday and Sunday morning.
See the Binary Option Types Glossary