The investors who reap the highest are those who consult with the best in the business, be they fellow traders, analysts or other stakeholders. In binary options trading, many investors have made it big in the market by consulting with the best binary options brokers. Trading in binary options is a fast paced encounter and it is difficult to succeed without the help of an experienced binary options broker.
How to Identify a Reliable Binary Options Broker
When beginning to engage in binary options trading, one of the trickiest things is to know which binary options brokers to trust and which ones to give a wide berth. It may be even trickier in countries like Canada where binary trading is not explicitly regulated. However, there are many binary options brokers practicing in Canada but whose licenses have been issued in other countries, like the US, where binary trading is strictly regulated by the government. Such brokers have licenses that a potential investor can demand to see. Other brokers who are not legally registered can only rely on their reputation to build their name. That is also not too difficult as investors keep providing reviews online, and potential investors can have a good idea who the best binary options brokers are.
The Basics of Binary Trading
Much as the binary option broker is responsible for the ultimate calls on the trading floor, it is important that investors understand what is involved in the business. Without the basic information, expectations may be too high, in which case one may think the binary options broker is poor in business, or they may be too low that individual investors become too cautious, thus investing too little relative to their capacity and available opportunities.
Here is how the bidding goes:
In a standard binary trading case, the investor pays a premium ranging from a dollar to a hundred dollars, and gives a figure below or above which certain securities in the stock exchange will move. The investor also mentions an exact timing during which the strike price will apply. One important factor to note in binary trading is that the investor can foretell the maximum foreseeable loss. This is very much unlike other forms of trading where the magnitude of loss is unpredictable.
Here are examples of binary trading bets:
- Betting on the price of gold
- Trader pays a premium of $45
- Bet being that the gold price will rise above $1,255 at exactly noon today
- If the gold price is anything lower than $1,255 at noon, the investor loses the entire premium of $45
- If the gold price has risen by whatever margin above $1,255 at noon, the investor wins the bet and earns $100 in full
- The investor, therefore, earns ($100-$45) which is $55 as profit in one go.
- Betting on Forex
- Pay a premium of $75 upfront
- The bet being that the exchange rate of USD/JPY, that is, the US dollar to the Japanese yen, will rise above 78 by 3pm today.
- If the exchange rate is anything below 78 by whatever margin, the investor loses the $75 paid as premium
- However, if the exchange rate hits a decimal or more above 78, the investor wins the bet and earns ($100-$75) which is a profit of $25.
The point is that in binary option trading, one can bet on any stocks listed on the exchange. So it is a market with a wide range of options. The great thing about trading in binary options is that risks are limited and easy to prepare for; and the nature of business facilitates multiple transactions in a day.