Binary options have become a very popular financial instrument for young traders. It’s obvious why: The so-called all-or-nothing options promise high profits and are rather easy to understand. In contrast to other options, traders only have to state whether the price of an underlying asset will be below or above a certain value once a binary option expires.
While they can be profitable, binary options also pose a high risk: If the trader´s prediction was wrong, the binary option goes valueless. Yet, there is only a 50% chance of making the wrong decision, which leaves 50% for making the right one. For traders, that means that binary options trading can be a fun and lucrative experience as long as it’s done with a regulated online broker like IQ Option. Check out the binaryoptions.com review on IQ Option to understand why the broker is a great partner for binary options trading. Before getting started, you should know the following fun facts on binary options.
We just mentioned how important it is to only trade on regulated platforms. That way, you can avoid fraudulent activities. Some brokers try to lure attentive customers by issuing their license number in a way that gets traders to believe it´s a proof of regulation. When thinking about signing up with a specific binary options broker, traders should always do some research on the alleged regulation number. If it turns out that it’s merely a business registration number, the broker is not a good choice.
Even though the provider might stick with strict intern guidelines that could guarantee a safe trading experience, a regulated broker is always the smarter choice. Traders should also keep in mind that some countries do not allow binary options trading with non-regulated brokers.
Most traders assume that an online broker that specializes on all-or-nothing options is an expert in this field – just like a hairdresser is an expert on haircuts, hair colors and hair care in general. But they’re not. In fact, online brokers are mere service providers and an interface between the trader and the exchange market.
Even though some brokers offer you many sources of information on binary options trading, you should always rely on yourself and your own trading skills. It’s up to the traders to learn from and about the market. After all, binary options are financial speculative instruments, and a broker won´t take your task as a trader away from you.
Binary options are financial exotic options, which have been subject to fraud in the past. Due to their 50% risk of loss, some governments deem them gambling. That is why there are nations that have prohibited binary options trading. The field is a very controversial one indeed. Still, the UK government has decided to allow binary options trading.
With binary options, there is a 50% chance of making the right decision and making high profits. But that doesn’t mean that it’s easy to win. In order to be successful at binary options trading, it’s essential to inform yourself about the market and about economic as well as political correlations. As a prospective trader, you should also make sure to define your individual trading style and to learn about trading strategies. Only with a diverse basic knowledge will you be able to make good decisions.
And good decisions are more essential with digital options than they are with other financial instruments. Because, if your decision is poor, you´ll lament a high loss.
Just like with any other type of investment, it is possible to become rich. But traders should be aware that it can take a long time before trading becomes really lucrative. Investors should also keep track of the underlying assets of their options, for example foreign currencies.