Slide Background

finance: Binary Options

Slide Background

Binary Options

As the ‘binary’ in their title implies, binary options are a type of trading that requires traders to choose between two outcomes. In the case of binary options, the trader is required to guess whether a commodity, currency, index or stock will rise or fall at the end of a given period of time. If the trader believes that it will rise, they will buy a ‘call’. On the other hand, if they believe that the market is falling they will purchase a ‘put’.

The Advantages of Binary Options

One of the great things about binary options is that they are a relatively straight-forward way of trading as the trader only has to decide whether the market will rise or fall. This makes them a particularly popular choice for novice traders.

With binary options, the risks and rewards involved in a trade are very clearly laid out, allowing traders to know exactly where they stand. Again, this clarity is very attractive with traders.

If you can develop a strategy or a system which make sure that you are correct more than 70% of the time, there is the potential to make some serious cash, especially on financial options which seem to sport the most lucrative returns.

There are a number of online trading sites that specialise in binary options and have online platforms, allowing you to trade from the comfort of your own home or on your smartphone.

Top Binary Options Providers in the UK

Company Minimum Trade Maximum Trade Maximum Payout Mobile Trading
Trader World £5 £1,500 85% Yes
Options XO £10 £10,000 85% No
Option Time $5 Varies 90% No
BDSwiss $25 $1,500 85% No

Things to Remember

If you are confident that you want give binary options a go, here are some things that you should take into consideration before putting down a deposit:

  • While there is the potential to win some great profit, unfortunately, the odds of winning seem to favour the broker in most cases. Indeed, a recent report into the binary options market revealed that in order to break even you will have to guess correctly 55% of the time.
  • Remember to do your research before you place a wager. Those who are well-versed in the stock market and do their research carefully tend to enjoy higher returns than those who blindly place wagers.
  • When looking for an online broker, try and find one that will not take away your entire stake if you should choose an incorrect option. While this will not eradicate all the risk involved with binary options, it will certainly limit your losses.
  • You cannot withdraw your wager once you have placed it, so do choose carefully.