Binary options trading Guide & Brokers
There are many ways in which one can get involved within the world of investments. One such way is binary options trading. You may be wondering what are binary options? Well, Binary Options is a form of investing that comes with an all or nothing payout, thus the term binary.
There is no middle ground with this type of investment, you either obtain the fixed amount or lose it. The underlying principle behind a binary option investment is that you pick yes or no, as it relates to price fluctuations in global markets. Examples of binary options trading includes currency pairs (e.i., Forex), commodities, or shares.
There are a few common terms associated with binary options trading that everyone should know. The terms include payout, call options, put options, strike price, and expiration date. The payout is the amount of money that an investor can make if their prediction is accurate. If the prediction is incorrect, then the investor will lose their principal investment.
Call Options are a prediction made when an investor believes the value of the asset will rise or move in an upward direction during the trade. Conversely, Put Options are a prediction made when an investor believes the value of the asset will decrease or fall from its current price. A Strike Price is the asset’s current value when the binary options trading is initiated.
Therefore, investors will observe whether when the value declines (put options) or rises (call options) from the strike price. Finally, the Expiration Date is the time for which the trade is set to end. With binary options trading, one predicts whether the value of an asset will rise or fall within a set period of time.
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What is Binary Options’ Risk?
The premise behind binary trading is straightforward and simple, but like other investment types, there is more than meets the eye that traders must be aware of. There are five risks associated with binary trading that traders should be aware of prior to executing any trades.
The first risk is that binary trading is a short-term trading, meaning that the expiration date is set shortly after predictions are made. With such a short span between prediction and expiration, there is a much lower likelihood of the prediction being accurate because it’s very difficult to predict short-term changes.
The second risk is associated with volatility. All investments have the risk of volatility, so this isn’t limited to just binary options trading, but certain assets’ market is more volatile than others (i.e., Iron Ore), so it’s important to research assets that are highly volatile versus more stable when engaging in binary trading.
The third risk is associated with the all-or-nothing nature of binary trading. One can either make great gains, or lose substantially. Other investment opportunities have a middle ground where a loss may not necessarily mean a total loss, but binary trading is an all-or-nothing game. The third risk is associated with some binary options brokers, which make it challenging to withdraw funds. Some brokers require that investors overcome various hurdles before their account is eligible for withdrawing funds.
Finally, binary options in countries other than the United States lack strict regulations, which make the investment option inherently risky. The United States has a strict regulatory body and while other countries still have some forms of regulators, they are nowhere near as strict and protecting as the United States. With all of this being said, it’s important to thoroughly research any and all investments before executing trades, this is not a rule that is limited to binary trading.
How to win at 60 seconds Binary Options
A type of binary trading is 60 second Binary Options trading is a form of binary options where the expiration date is 60 seconds past the time when the trade is started. Traders who wish to use 60 second binary options want to be active in the market and see fast results, but there is risk, including all of those mentioned above.
Traders who wish to take advantage of 60 second binary options have the potential to lose a lot of money as they can make poor trading decisions due to the fast paced nature of the type of binary trading. The advantage of 60 second binary trading is that you can trade as much as you’d like as trades end every minute. This allows for traders to take advantage of short term opportunities if they see assets rising or falling quickly. The instant gratification that accompanies 60 second trading can be both an advantage and disadvantage, depending on the self-control one has with the quick-paced trading.
To be successful, one must research the trades they execute and exercise extreme self-control as to not give in to instant gratification. Wins can feel good, but it’s important not to trade more than you can afford to lose, because the loss can be great.
Binary Options Brokers
Now that you’ve read a crash course on binary options trading, you may be wondering what the best binary options brokers are in South Africa? There are several well-reputable brokers that one can choose and we will break them down here.
- IQ Option. IQ Binary Options is known as the best binary options broker for South Africans for a myriad of reasons. IQ Option is beginner friendly, has the lowest spread at .6 pips for Forex Trading, is available on multiple platforms, and regulated by several regulatory bodies including FCA, MiFID, and CySEC. Overall they are rated highly in their fee structure as well, which means more money in your pocket. The downside of IQ Option is that they do not have MetaTrader, the highest leverages on the market, and the broker is limited to certain jurisdictions.
- ExpertOption. ExpertOption is known as the best binary options broker for trading experience. They are also regulated by various regulatory bodies including FMRRC, VFSC, MiFID, and CySEC. They have low fees and extensive asset coverage. Moreover, they are known as being the best options broker for beginner traders. They have similar downsides as IQ Option.
- OLYMP Trade Broker. OLYMP Trade Broker is also known as one of the best binary options brokers for people living in South Africa. Like the others listed above, they have low fees, a low minimum deposit, and are beginner friendly. They are only regulated by CySEC and are limited to certain jurisdictions as downsides.
- Expertoption Broker. Expertoption Broker is one of the best binary brokers for beginners given their massive archive of tutorials and educational resources. They are regulated by several regulatory bodies and have low spreads and fees. Compared to the other brokers we’ve listed, they do not have the highest leverage on the market and do not have the MetaTrader software.
- Pocket Option Broker. Finally, there’s Pocket Option Broker which has similar benefits as all of those that are listed above. The biggest downside of Pocket Option is that they do not have the best customer support compared to the other brokers listed. They do have more accessibility across jurisdictions if you live in an area with limited options, and are still highly rated despite the lower customer support score.
All of the Binary Options Brokers listed above are excellent starting points for your research. While they all have similar abilities, they each have their own unique sets of features and perks that can help people meet individual goals. We recommend that you explore these five brokers to find one that will best meet your needs and has a platform that is best suited to your preferences.
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