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Binary options: Forex, stakes, excitement! Options trading has become an integral part of trading on both currency and stock markets since 1998.
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ust like any other relatively new financial instrument, binary options are still being looked at with a huge portion of skepticism by those who are used to traditional trading. However, options trading appeared in 1998 and has become an integral part of trading on both currency and stock markets. Let us break down the definition of options. Similarly to the ordinary stock options, to which we will revert soon, a binary option is a wager on the movement of one or another asset in a certain direction. In this context, we deal with currency pairs. For example, trading a binary option, a trader puts an amount of money on either strengthening or weakening of the euro against the US dollar throughout a set period of time, such as a trading session or a day.
wind is blowing, or the trend is moving, you can increase the efficiency of your binary options trading up to 60 or even 70%. Then you are more likely to earn a substantial profit. The process of options trading is quite simple. You choose a currency, the movement of which is easier and more convenient for you to predict. Your projection can be supported by statistical figures from the previous trading sessions, news, analytical reviews, or maybe some financial instinct. The key advantage of binary options is that there is no trading itself in the platform, which is time, effort and emotion consuming. You only have to buy an option and wait for the option period to expire. After that, you either win a double stake or lose the amount of money you wagered. Everything is more than simple and elementary! Being armed with information (news, analytical articles, statistics), you can make a steady income from options trading. Many traders who got involved into binary options trading say that options trading reminds a gambling game, but the difference is that a player, or a trader, can and should influence the outcome and gain profit. Binary options are the
“A binary option is a wager on the movement of one or another asset in a certain direction.”
type of options which are actively traded on the US stock exchanges, such as the CBOE, CME, and AMEX, and they are aimed at market majors. No way for lesser mortals Only institutional banks, funds, and financial groups have access to these options. So, there is no way here for lesser mortals. But if you are a mere mortal with the US citizenship, you can avail yourself of stock options trading on Nadex stock exchange. Do not be upset if this does not apply for you because stock options have rather significant disadvantages. First of all, you will have to pay taxes. Second, you should qualify as an investor in order to access the stock exchange. Last but not least, deposits and withdrawals of money are available only via wire transfers - forget about electronic payment systems or e-wallets. If you are interested in options, you will easily find a reliable broker in the forex market with a set of services, including binary options trading. One of the first brokers to introduce binary options was InstaForex that still holds the leading positions in this sphere. All kinds of binary options are available, from those on currency pairs, metals, and CFDs to expiry and intraday options. Anyway, there are so many arguments about options that it is better to try than keep on wondering, especially, when you need only one day and a few dollars to try this financial instrument out.
Not a game of luck However, do not rush to call the options trading some kind of roulette or any other casino game, which is no more than a game of chance and luck. Of course, you can trade binary options relying blindly on good fortune, but then your chances to make profit will be equal to the prospect of losing the option (i.e. the amount of money wagered on either growth or fall). When you begin to ‘feel’ the market, understand where the SINGAPORE BUSINESS REVIEW | MAY 2016 11