Many binary options traders believe they can become rich in just a few days. In my country, these traders are called “The Marida Traders.” Marida is actually a tiny fish that feeds all kinds of undersea predators. The Marida Team represents the easiest way for brokers to make quick money. That is why binary options brokers often feed the Marida Team with high bonuses.
The Basics of Binary Options Trading
This is a basic tutorial on binary options trading. Binary options contracts are highly risky financial products, and only professional traders are likely to profit from them. Trading binary options is also very expensive. At best, binary options brokers offer returns of up to 95%. That means if you win, you receive 95%, but if you lose, you lose 100%. In other words, they charge a 5% fee on every transaction.
Introduction to Binary Options
A binary option, or digital option, is a relatively new financial instrument that offers a fixed payoff if the option is in-the-money at expiration, or nothing if it is out-of-the-money at expiration. Binary options are called "binary" because they offer only two possible outcomes (win/loss or 0/1).
What differentiates binary options from other financial instruments is that their payout is pre-agreed and fixed. Whether a trade ends deep in-the-money or just slightly above the purchase price, the return is the same and fixed. Furthermore, when a trader purchases a binary option, they are buying the right—not the obligation—to buy or sell a specific asset at a pre-determined price within a pre-defined time frame.
Common Types of Binary Options
(i) High-Low Binary Options – Decide whether an asset will expire above or below the purchase price
(ii) Touch-No Touch Binary Options – Decide whether an asset will reach a specific price before it expires
(iii) Range Binary Options – Determine whether an asset will trade within a particular price range or outside of it
(iv) 60-Second Binary Options – Short-term and very risky products; it is generally better for traders to avoid them
(v) Option Pairs – Trade one asset against another
Payout and Refund Rate
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The Payout Rate refers to the return a trader receives if a binary option ends in-the-money. Binary options brokers usually offer payouts ranging from 75% to 90%.
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The Refund Rate is the amount returned to a trader if a binary option ends out-of-the-money—typically between 0% and 15%.
Available Markets
(i) Forex Currencies (EUR/USD offers the best payout rate)
(ii) Metals, Commodities, and Energies
(iii) Popular Stocks around the world (Apple, Facebook etc)
(iv) Popular Stock Market Indices (Dow, Nasdaq, DAX, S&P)
Advantages & Disadvantages of Binary Options Trading
(↑) Trading Binary Options Advantages
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Easy-to-use trading platforms for beginners (with simple trading orders)
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Ability to trade both market directions (Bull or Bear)
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Profits can result from even tiny price movements
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Full asset index available (Forex, Stocks, Indices, Metals, and Energy)
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Predefined profit and loss potential
(↓) Trading Binary Options Disadvantages
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Most binary options brokers are unregulated (and potentially scams)
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Highly risky financial product for short-term traders (profitable only for professionals)
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Extremely expensive pricing (best-case return in simple up/down options is 95%, while risking 100%)
Choosing Binary Option Broker
These are the main factors determining the best brokerage choice for a trader:
(1) Regulation and Headquarters Base (very important)
(2) Payout and Refund Rate
(3) Withdrawal Methods, and Fees (if any)
(4) Available Tools (early expiry, take-profit)
(5) Responsive Customer Service
Here are some simple rules you should be aware of when trading binary options:
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Choose a broker wisely (focus mainly on regulation and headquarters location).
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Don’t rely on bonuses (good brokers have much more to offer than tricky bonuses).
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Open a demo account and practice thoroughly before trading with real money.
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Be cautious with expiry times; short-period trading increases your portfolio risk.
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Don’t try to trade the entire market; it’s better to focus on a few trading assets.
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Choose to trade popular assets (they offer better returns).
About Binary Options Bonuses
Many binary options traders believe they can become rich in a few days. In my country, these traders are called “The Marida Traders.” Marida is a tiny fish that feeds all kinds of undersea predators. The Marida Team represents the easiest way for brokers to make quick money, which is why binary options brokers attract the Marida Team with high bonuses.
Binary Options Trading Signals
A binary options trading signal is a suggestion for executing a specific trade. Signals can relate to any market, including Forex, Stocks, Indices, Metals, and Energy. A trading signal provides traders with three key variables:
(i) An asset and a target price
(ii) A time frame
(iii) A stop-loss price
Binary options trading signals can be generated by humans or computer systems and may be distributed via email, SMS, Twitter, etc.
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