Once you consider to start Binary Options trading, one of the first things you need to do is choose a broker, choosing a reliable broker is the single most critical factor to your trading success.
There are dozens of online brokers out there but most does not accept USA traders. Based on our experiens the best US binary options brokers are those mentioned above. They are straightforward website to trade binaries online with a good trading platform, research and educational tools. It has several different account levels that make it easy for anyone to open an account. it is is an excellent online broker suitable for beginners and pros alike.
Now I would strongly encourage you to go and visit the above sites right now even if you are not yet decided whether you want to go into binary trading. Why? because their site provides tons of free education materials, videos and best of all a demo account that allows you to practice options trading for free without the need to deposit any money. Simply register for a free demo account and start "trading" - by actually practicing and experiencing it firsthand you'll be able to decide whether binary trading is for you.
What Are Binary Options
Before delving into explanations as to what are binary options I want to touch on a subject that is in my opinion the single most critical factor in achieving success with trading binaries and that is 'scam'. I'll put it bluntly, successful trading depends entirely on the integrity of your broker (see: how to spot a scamming broker). That is why we compiled a list of the 10 best brokers. These are brokers that were tested and found to be reliable and trusted - we recommend you choose your broker from this list.
Now back to our subject: what are binary options (BO) - also referred to as 'digital O', 'fixed return Os' and 'all-or-nothing Os?
A binary option is In fact a prediction of which direction the price of the underlying asset (a stock, commodity, index or currency) will move by a specified expiration time. With BO, an investor doesn't purchase the asset - he is merely predicting the direction that the underlying asset moves. There are actually just two possible outcomes. A fixed gain if the O expires “in the money”, or a fixed loss if the O expires “out of the money.” The price of the asset is not important. The only thing that is matter is whether the prediction is correct or incorrect.
A binaries trade usably involve three steps:
First, you choose a trade expiration time, this is the time you want the trade to end. It could be any time period between a minute and a week - usually it is within the day.
Second, you choose Call or Put. If you think the price will end up above the current price: you click the buy/call button. If you think the price will end up below the current price: click the sell/put button.
Now that the trade is placed, you simply wait for the outcome. If the trade expires 'in the money', you make a profit. If it expires 'out of the money' , you'll lose.
Now you can see where the "binary" comes from, it stresses the fact that there are two possible outcomes to a BO, both of which are set and understood by the investor prior to placing a trade.
Now here is an example:
You purchase a Google BO for $25, with the opinion that within 2 hours Google's shares will be higher than they currently stand. If you are correct you get a previously set percentage return on your investment (e.g. 82%), should the shares go lower you lose your investment (some brokers will give you back a small amount as a "refund").
A number of factors distinguish BO from regular stock options.
Typically the short-run expiration time suggests traders could make an immediate profit on the BO and therefore are way more versatile in their investments.
In a regular stock option, a trader will pay per contract. Therefore the investor may profit or lose a sum based on the quantity of points difference between the expiration level and the strike price. In contrast to BO in which the two outcomes are actually set from the beginning.
An investor in a BO needs to hold onto his option until the expiry date. He must consequently take more care when ever buying his Os as he is unable to sell them after they are purchased.Best us binary options brokers Tips Video
BOs are categorized as exotic options, however, inside the financial markets they sometimes are termed as digital Os. While digital Os are quite simple to understand and easily traded, the mathematics behind the pricing is complex. It is because of this that digital Os are referred to as exotic Os.
For years US binary options brokers were traded by large institutions and their clients in the over the counter market (OTC). In 2008, the Securities and Exchange Commission in the US approved the listing of BOs with continuous quotations and now BOs are also available to individual investors.
Most BO tradings nowadays are performed online thru private brokers that use sophisticated trading platforms.
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