Binary options trading has been amazingly popular in the last several years. Throughout the years binary options have been proven to be very profitable line of business and the binary options trading market has saw thousands and thousands new traders every day. If you look for the experiences of people who actually got into the business of trading binary options you see that many of those traders have positive experience and that they managed to earn significant benefits. However, since every story has two sides, binary options trading also has the other, more negative side. The negative side of binary options trading are those broker providers whose only people is to scam traders and to take away money from you.

Since, binary options trading is becoming more and more popular and since there are more and more brokers that enable traders to trade with binary options more easily and more successfully, a certain number of brokers that have been market as scam appeared with only intention of scamming traders. Being scammed is not a pleasant think – those who were scammed will testify to that. In order to avoid those feelings, this article will provide you with the most important features that characterized fake or scam binary options trading.

No Name of the Company behind the Broker

One of the most obvious signs that the binary options broker that you have selected is a scam is the fact that you are not able to find the name of the company that stands behind the broker. No name as well as no adequate reputations means that you will not be able to find the information about the registration or the license under which the broker should be registered. This, in turn, means that broker does not want to provide that kind of information and because of that you should walk away from that broker. Being in a situation where you cannot find a name that has developed and released the binary options broker should be good enough sing for you to abandon that broker and to look for another broker that will not have the characteristics that will be mentioned in the following part of this article.

No Good Features

Even though the subject of this article are negative things about the brokers that appear to be scams, you should also be looking for some positive features or sings when selecting the broker that you will be using when trading with binary options. One of the good signs or features of a broker that is not a scam is the feature that provide the traders with the opportunity to learn and to educate themselves about the market and how to actually trade binary options. The main reason why you should be looking for this is the fact that binary options trading brokers that are scams will actually not provide information about this feature or it is better to say they would not provide this feature at all for their traders.

Unrealistic Promises

Big and amazing promises truly are good marketing strategy for companies that actually are intending to fulfill those promises. However, when it comes to binary options and binary options trading big and amazing promises are usually signs that the broker that provides those promises is actually a scam and that you might end up losing your money if you decide to trader with that broker. Those broker who are promising that you will earn amazing amounts of money by doing almost nothing are selling fake promises. Anyone who actually has had experience of trading with binary options knows that, even though occasionally it is a very successful line of business, a trader must put a lot of effort, knowledge and skills into making a successful trade. Trading successfully without a lot of effort is just not possible with binary options.

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Fake Trade Success Rate and Fake Percentage of Return

Another aspect that can be related to the issue of unrealistic or fake promises is the trade success rate and even the percentage of potential returns that the binary options brokers are providing for the purpose of advertising. Similar to earning huge amounts of money by almost not doing anything, an experienced trader knows that trading with binary options cannot have the success rate that is almost 100%. The perfect score is impossible in almost all lines of business and that is especially emphasized with binary options trading.

Another issue that might get traders fooled is the percentage of the potential return that the broker is providing for traders. If it happens that you come across a binary options broker that is providing 100% of returns, it means that you have encountered a fake binary options broker and in that case it would be best to move away from that broker. The main reason why those brokers that provide 100% returns are scam broker is the fact that brokers need to stay profitable, that is, they need to be able to make certain amounts of money and by providing 100% return they will not be able to earn any money.

The Lack of Adequate Customer Support

One of the most important features of a binary options broker is the customer support service that needs to be available for the traders at any given time. The reliable and legitimate binary options brokers are aware of this fact and they provide their clients with the sufficient amount of information about how and when to reach the customer support services. However, those brokers that are not reliable and legitimate will not provide that information about the customer support and once a trader has realized that he or she cannot find that information, he or she needs to look for another binary options broker.

As anyone who has experienced the process of binary options trading knows, this process is not a quickly process and it requires lots of effort and devotion. Due to the fast pace of life in modern days, many binary options traders do not have enough time that they could spend in order to trade binary options. Exactly because of that, many companies have developed different tools that enable traders to automatically place binary options trades even they are not at their computer of mobile devices such as tablets or mobile phones. This theory gave way to many fraudsters to use it to their benefit and create the perfect system to lure traders.

During the last several years, there has been an increase in the popularity of the binary options robots that provide traders with the possibility of easier trade as well as more successful rate of trades. Created in order to help traders with their binary options trading process, binary options robots have proven to be a very useful instrument in achieving great success when trading with binary options according to the advertisements which have flooded the Internet. Still, traders should not be fooled by these ads, since there is little truth in statements like “The robot reduces human error and does not require the trader’s participation”. It indeed requires the trader’s participation if they want to avoid loss of their investments.

Binary Options Robots – Basic Information

First of all, allow us to define the binary options robots. Binary options robots are software products that are providing the automated process of trading with binary options. These software products are producing something called binary options signals that are used by these robots to place trades. It is no wonder that many traders fall for the trick when the robot developers present it like this. But the truth goes deeper; many robots are developed by scammers who actually program them to work against traders and to do the opposite. If you for example set the option Stop Loss at a specified amount, it is more likely that the robot will not close your trade at that point, but will let you keep losing until your account is depleted. . We have also mentioned the notion of signals that these robots generate in order to make the trades. These signals are actually designed to connect to your account and act on behalf of the scammer. The scam binary options robots are always said to have a 90% and above return rate, which is impossible. Still, many new traders do not know how much returns they can secure and their inexperience often makes them believe that it is possible, whereas experienced traders know that it is not feasible in the volatile options market. Random Picks of Trades

Unfortunately, many expert traders have come to the conclusion that the robots often pick the trades randomly and account for more losses than wins. They can have a winning streak which fools the traders, but most of the time, the trades will be unsuccessful in over 60% of times. Performance of the robots is very questionable, especially when they are cheap and free.

Of course, today, traders have to rely on technology to help their trading, but they should make sure that the robots were made by reliable computer programmers and financial experts. Even when having good auto-software, experienced traders know that they cannot solely rely on that but have to swoop in from time to time. The trader should always be the one with the upper hand and control his/her trades no matter how good the software is, especially if he/she is notable to recognize and identify features that indicate whether the given binary options robot is a scam or not.

Software Malperformance

Traders should also know that the developed binary options robots lack proper testing on the market. No one can guarantee for their performance and it has often be the case that the software behaves out of control. First of all, many traders reported that the robots started placing trades on their own or they placed the same trade over and over again and they could not stop it. These technical errors are quite common with the robots as a result of bad quality. The software often freezes which makes any action impossible and only traders know how timing is important and that every second can matter.

The scam robots will usually have these features and torture you through the majority of your trades. Even when the robots are not scams and perform smoothly, a robot will not recognize sudden changes in the market like the trader, but it will keep behaving according to pre-set options. Between the time of setting the robot’s parameters and the time of placing a trade, major events could have turned the market upside down where an instant change of mind is required calling for quick action. In this situation, a human logic would benefit the trader more than a pre-setrobot, since the robot will fail to adapt to the new situation.

Conclusion

Binary options robots, which can be available as part of the binary options platform or bought and installed individually, are not the perfect solution as portrayed by many robot advocates, i.e. scammers and fraudsters. The majority of the robots are inferior to human trading skills.

Traders should also know that there is no quick way of making money, especially not the kind robot scammers portray, and even binary options requires thorough market knowledge and involvement on behalf of the trader.

Traders should stay away from the malperforming robots and rather focus on market research and analytical market studies if they want to generate more returns than losses. You can benefit more from your own trading strategies if you carefully observe the market than from automated trading. The fact is that robots cannot predict market events; no one can, not even financial experts who have spent years and years on their research to crack the code of market volatility. Automated trading is only recommended to experienced traders who know exactly what they can expect form trading signals and when to incorporate them. All others should hit the books and get to properly know the market before they engage in any kind of risky robot decisions.

There is not one answer to the question “Are the binary options legal?”. Therefore, it is not particularly easy to give an answer without its further interpretation and explanation. Different countries have the different opinion on this matter. For some it is a welcomed service, for others is equal as gambling and forbidden, but there is one thing that many countries agree on, and that is the regulation of such services. The countries which encourage binary options recommend and work on regulation of companies, providing the safety for the clients if the safety in this financial branch is possible at all. We all should be aware that the only reason binary options can survive is that of the transparency of the prices, and because there are regulatory bodies which are putting these brokers under control.

The regulatory agencies in Europe, the United States as well as other areas where the binary options are legal, work extremely hard to create rules which all the companies need to follow. Through these regulatory steps, the existence of binary options trading services is ensured. This way the possible scams are prevented and the laundering money is less likely as well. These additional steps and security checks are signs that the broker is serious and trustworthy.

Nevertheless, many countries still consider this as gambling and do not approve binary options or CFDs. For example, it is known that the US, most of the countries of the EU as well as the UK, Australia, and South Africa accept binary options trading services, and have specifically designed laws which regulate these companies. The EU laws are particularly strict, but the area is particularly fertile for these kinds of services.

Binary Options Around the World

Take Cyprus, for instance, which counts a great number of companies which operate worldwide. Cyprus has become a center for binary options and Forex licensing. All companies which offer service in Forex or binary options markets should be regulated by the Cyprus Securities and Exchanges Commission (CySEC). This regulatory authority is one of the best and most reliable authorities and the leading regulator of brokers worldwide.

In the US, Forex trading is regulated by the National Futures Association (NFA), and the CFDs are illegal in the USA. Binary options trade is regulated by SEC and CFTC. All the brokers can offer binary options services to traders in the US without the necessary license. Further, the US traders are allowed to use offshore brokers at their risk.

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There are also countries which have not particularly stated their decision on binary options, such as Canada. Canada and such similar countries are a gray area of trading. These countries have no particular law stating that binary options trading is illegal, but there are no laws that specifically regulates them. Brokers are not usually registered in Canada since the regulation is quite complicated in Canada because of many territories and provinces. Being a trader in binary options is legal, and Canadians can trade with brokers worldwide.

In the UK the Forex trading and CFD trading are controlled by the Financial Conduct Authority (FCA), and a broker based in the UK cannot offer services to UK traders if it does not have FCA license. On the other hand, the UK government considers binary options trade to be gambling. Since this is the case, regulation of binary options trading is under the UK Gambling Commission. Even though it is not recommended, UK traders are free to use offshore brokers.

In Australia, it is illegal for brokers without an ASIC license to offer their services to Australian citizens. All the companies which disobey these rules can face serious consequences.

France has a particular situation. Trading in Forex and CFD markets are regulated by L’Autorité des marchés financiers (AMF), meaning they are legal. French citizens can use offshore brokers for as their trading service, even though they are advised not to. On the other hand, binary options brokers are not legal, and should not offer their services to French traders. Furthermore, even advertising binary options are illegal.

Since August 2016 similar case is Belgium. The Belgium authorities always issued warnings against scam companies until they finally decided to ban online trading in binary options, foreign markets as well as CFDs.

However, the Netherlands also decided to follow France’s example. Even though in this country none of these online trades is illegal, they are not advised or recommended in any case. The advertising of these services is not allowed.

Reasons Behind the Banning Policy

There are many reasons that governments around the world decide that online trading possibilities should not be allowed. One of the most common reasons they state is the scam companies which can cause many troubles not only for an individual but the country as well. Many of them believe that no regulatory authority can provide that amount of safety for clients. Besides, manipulations are lately present even in regulated companies, which means that this market indeed offers the possibility for shady companies or shady individuals behind the regulated companies to confirm what the majority was scared of at first.

Whatever the law of your country says, you should be aware that this is in a way gambling. It is not the same, but still, some of the actions are in the hands of pure luck. Be sure to educate yourself and if you want to be a part of the online trading market do it responsibly. Find the good and regulated company which has positive customer reviews and feedbacks. Or simply, protect yourself and find other sources of making the profit.

Binary options trade is exceptionally popular in the United States. One of the reasons is that the whole industry was generally created in the US and there is a significant number of binary options brokers that accept US residents as clients. Meanwhile, in Europe, the growing number of countries which decide to ban binary options offers another side of the medal. France, Belgium, and the Netherlands have a strict opinion when it comes to this kind of trading, and even advertising these services is illegal. Nevertheless, the US remained open to the binary options market and allowed traders the possibility to receive services from other brokers outside the US. Despite the fact, binary options trade is still contradictory to a great extent.

There are many articles available online which present the risks and facts concerning binary options trade. Some consider it to be equal to gambling, while others believe it is a perfect way to present their skills in economics and concern themselves as top traders. Whatever the fact may be, there are some things that we all need to have in mind

The Current State in the US and the Reasons Behind

As it was already mentioned, binary options trade enjoys great attention in the US. They are not illegal in the US according to both federal law and state law in each state; the US government have labeled binary options trading as a form of gambling.

However, there is one thing that they care a lot about, and it is the CFTC license. This license is not easy to get, but the companies which are under CFTC regulation can offer their services to the US citizens. The companies which are not licensed with CFTC can exist on the territory of US but cannot offer their services to the US residents. It means it is legal to trade, but it is not legal for brokers to operate everywhere.

It may be confusing at first, but it has a simply explanation behind. Traders can make their decisions and get services at their expense and risks anywhere they want. Brokers that are not regulated can cause many troubles for the country as well. Because of that, the country is trying to protect themselves by forming the regulatory authority.

There are many binary options brokers which are not licensed by CFTC, but that accept USA traders. Most of these brokers are licensed in Europe, especially Cyprus which has one of the best regulatory authorities. On the other hand, the atmosphere in the US is not welcoming when it comes to offshore companies.

This further means that binary options trading laws are particularly restrictive in the US. The CFTC license has only a handful of companies such as Nadex and currently no offshore broker has a license in the US. However, offshore brokers cannot even be regulated by the US law, which allows traders the possibility to find more possibilities for themselves.

The CFTC and SEC have a difficult task when it comes to offshore companies. Namely, they have a hard time with identifying offshore companies either as legal or illegal. For example, in 2013, the CFTC and SEC issued a warning document for all US traders where they again emphasize that many online platforms do not operate in accordance with CFTC, SEC, and FINRA regulations. In 2015, the CFTC again published a new warning called the RED List or Registration Deficient List against all international brokers who do not have a formal CFTC license but yet still offer their services to US citizens. We see that the USA is also in a kind of undefined environment, since the CFTC is not always sure if a given offshore company is in line with US regulations or not. It is not even clear if these warnings can lead to legal consequences or if they are just a nice gesture of CFTC to keep options traders away from potential offshore scammers. Even if companies which operate in the USA without a proper CFTC/SEC/FIINRA license are considered illegal, these companies are hard to track down and bring to justice before a US court.

Future of Binary Options

According to the popularity of this form of earning money, the binary options trade is still going to have bright future in front of it. However, it is not easy to say if the service is going to be totally legal, or the scam companies ruined that possibility and caused that people become more cautious when it comes to investing money in these services. The most probable outcome is that some of the countries will make binary options legal and available, while others will decide that it is for the best that this service becomes labeled as illegal.

The gap between these countries already exists, and it will probably grow bigger in the future. This scenario is more likely to take place than the one where some countries decide to change their opinion and admit that others were right – no matter if those are countries which are currently for banning binary options trade or countries which allow legal binary options services.

Legal vs. Illegal Brokers

It is the well-known fact that some of the brokers are operating legally in the US. However, the laws in the US are not that strict for brokers of binary options as they are for brokers for Forex or some other trade types. Rare are those which are regulated by the CFTC. The only company which has headquarters in the US, and which is regulated by the CFTC is Nadex. Besides, there are many companies which are based in other countries but provide their services to US citizens such as Binary Mate, Bol Financial, and MarketsWorld.

Risks

If you get services from a non-regulated broker, you can never be sure that there is no third party who monitors the transactions you make. In most of the cases, the thing that regulatory authorities are trying to enforce, your accounts will be separate from the companies account. Therefore, if anything goes wrong, your funds will be safe. Further, if your broker is regulated, the third-party is there to ensure fairness. Many things are up to chance, and since this is the fact, the risks are possible any time with both regulated and unregulated brokers. It means that no law can protect you if you decide to be irresponsible and reckless.

Binary options has integrated itself into the financial market as an alternative to the Forex market, enabling profiting, but as opposed to Forex, the risk is smaller. Binary options trading was introduced in 2008, and it needed a few years to gain in popularity and to be accepted as a proper form of investment. In contrast to Forex, binary options include better risk prediction, whereby traders can calculate how much they could possibly gain before they even place a trade.

Australia has always been a major financial investment center and its citizens have always enjoyed speculating on the stock market which is why Australians were one of the first to embrace binary options. Since binary options is not legal in all countries, one might wonder what consequences can be incurred on Australian traders. This review is going to break down the particularities of binary options trading in Australia and whether it is legal or not to make investments in this kind of market.

Is Binary Options a Legal Form of Trading in Australia?

The answer is yes. Australia counts to the countries that have no particular laws in place that prohibit binary options trading. The Australian legislation does not hinder people from opening broker companies of any kind or foreign companies to establish a market on Australian territory in the hope to establish an Australian customer base.

The government sees binary options trading rather a welcome alternative or addition to the functioning Forex and stock market. The government aims to set clear guidelines in order to regulate the binary options market in order to supress manipulation and scamming just like in any other market. It is quite amazing that the rise of binary options trading became so significant that it requires a serious governmental approach to control fraud and other forms of illegal actions.

The Australian Government and Its Protection Policy in the Options Market

Binary options has become so popular in Australia that the government assigned the task of regulation to no other than the Australian Securities and Investments Commission- ASIC. ASIC is already a well-known regulator and an old hand in regulating the financial markets of Australia by supervising the Forex, stocks, and securities industries. ASIC is responsible to the government and the Parliamentary Secretary to the Treasurer by submitting regular reports on its actions and activities. ASIC is not funded by the state budget, but relies on own revenues which it charges from its licensees.

An ASIC license is the only certificate that grants a legal permission to operate on the financial market in Australia. ASIC has proven its commitment to a transparent and fair market through the years which did not pass by unnoticed. The result is that ASIC enjoys the trust of the majority of traders and the relevant Australian institutions. ASIC is even known beyond Australian borders, since the financial market works on an international level and many Europeans and Americans are aware of ASIC’s role and policy.

Since binary options is relatively new, there is still a limited number of binary options companies incorporated in Australia, but Australian traders also enjoy the freedom to trade with international options brokers.

In order to prepare properly, ASIC issued a 4-year plan for the supervision of binary options companies (including Forex and CFD companies as well) in 2016. The document was set out on 44 pages addressing the main risks and challenges for 2016 and 2017and provides a legal basis for the said companies until 2020.

Still, the Australian government remains very strict when it comes to offshore companies and does not let them operate on Australian territory under an international license, but it requires the ASIC license. This means that a company under the supervision of the British FCA (which is the British equivalent of ASIC) cannot operate under its domestic FCA license but has to fulfil the ASIC criteria to open a branch office in Australia.

The ASIC requirements consist of a series of requests which the binary options brokers (as well as other non-banking financial entities) have to meet in order to operate in Australia. These requirements include sufficient substantial capital which will cover potential and real business risks and an insurance guarantee to clients in case of insolvency, as well as compliance with Australian laws related to finances, and qualified staff, especially managers, directors, and other key staff who have to have adequate qualifications and experience.

After the binary options broker has fulfilled all of the listed criteria, it will obtain the ASIC license, free to run its broker business in Australia. Also, in order to maintain the work ethics throughout, the ASIC team requires the subjects of regulation to submit regular reports on activities, including financial reports (all transactions included).

Are there Any Illegal Options Brokers in Australia?

Despite the efforts of ASIC, probably there are a dozen of unregistered options brokers who offer their services to Australian traders whereas being unregistered makes them illegal. ASIC tries its best to track down such brokers and they have significantly decreased the number of illegal brokers, but yet, the binary options market remains disintegrated to a certain extent which makes it hard to track down all fraudsters.

The unregistered options brokers sometimes falsely claim to be licensed and that is how they lure many traders. Traders should also be careful and make a thorough research on the options brokers before they register with one in order to be sure that they trade legally.

Are Australian Options Traders at Risk?

When trading binary options, there is always the risk of loss of investments. Well, this would be one type of risk, and it is completely normal, but they also might be at risk if they join the wrong broker. When registering with an unlicensed broker, it is like traders give their consent to trade without any safety net. If they get scammed by the broker, chances are that they cannot get back their assets since there is no legal form that binds the broker to give them back their money. The only thing that they can hope for in that situation is that the illegal broker will be charged for illegal business but they will probably never get back their funds.

We see that the binary options market has two sides, whereas to be on the good side, traders have to check out their options broker, the laws under which it operates, the laws that guarantee security of funds, and the overall image of the binary options broker.

Due to the increasing popularity of binary options trading websites, it is easy for potential traders to become curious as to what these sites may offer. Many of the online advertisements tout proven systems for guaranteed profits, making this arena ripe for scam artists who are more interested in profiting from traders rather than helping site users reap the rewards of honest investing.

With this in mind, there are many who may feel that trading binary options is similar to gambling. Yet, more educated and experienced traders argue that this activity is both an art and a science that allows the for the ability to profit handsomely – if conducted in the right manner.

Reducing the Gamble in Binary Options Trading

Although most of the binary options trading websites promote flexibility and a wide range of differing assets to trade, one of the keys to success in this arena is focus. As with most other undertakings, being a “jack of all trades and a master of none” opens the door to fragmented concentration that can ultimately result in trading losses.

Rather than attempt to master all types of options on every available exchange, traders may be more assured of profit in the binary options ring by placing their focus – and their funds – on just a few specific areas, at least until they are comfortable with moving forward.
Getting a real feel for the speed at which the market moves, as well as on how to conduct thorough analysis of options and their underlying assets, can also help to point newer binary options traders in the right direction.

Many of the better binary options trading sites allow their users to become more attuned to trading these types of options by offering online tutorials and guides, as well as by providing access to demo accounts where traders can participate without the risk of losing real money.

When considering moving to a new binary options trading platform, it can behoove even the most experienced of traders to get a good understanding of how the platform works, the options that are available, and where to turn for assistance whenever help may be needed.

Prof. Binary’s Trading Tip:

If you’re still unsure whether binary options is more like gambling you should start out with a free demo account and don’t invest your own money right away.

Click here to read our extensive article about binary options demo accounts!

How to Ensure the Safety of Investment Funds

While the trading of binary options is certainly not gambling, it is important that traders be leery of the many “get rich quick” schemes that surround this type of activity. One way to avoid this is to stick with the more reputable trading platforms that allow for a thorough education and understanding of how this type of trading works prior to putting any real money at risk.

Any and all binary options traders should research any options broker that they are considering in order to ensure that the entity operates fairly. It is also essential to steer clear of any platform that claims to offer a “proven system” for “guaranteed profit”, as there is no such thing. By following just a few simple common sense steps, both new and experienced traders can help to reduce risk and remove the “gamble” from their binary options trading activity.

While it is nearly impossible to cheat when trading in the binary options market, there are many trading “gurus” who offer various types of “cheat sheets” that may assist traders in making additional profits in this area of investment.

Those who offer such cheat sheets state that it is of utmost importance for traders to come into the binary options trading process knowing some of the “inside” tips for the actions that should and should not be taken.

By following this advice, traders are promised that their trading experience will become a much smoother one, allowing them to get more out of the binary trading process – including the potential for higher amounts of profit.

Prof. Binary’s Trading Tip: If you’re looking for a broker where you can avoid any fraud you should go with the world’s market leader, IQOption. This broker has a great reputation and brand name. You won’t see any fraudulent action there for sure!

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RISK WARNING: YOUR CAPITAL MIGHT BE AT RISK

First Things First

One of the first pieces of advice to traders is that of knowing the assets that they will be trading. Because the process of trading binary options involves analyzing specific assets – and in turn predicting what will happen with the underlying assets price over a certain period of time – the better that a trader understands the asset, the more likely he or she will be in predicting the price movement correctly.

One of the best ways to take advantage of a binary options “cheat sheet” is to utilize a demo account. Most of the online trading platforms will offer this type of account, allowing newer traders to get their feet wet by trading real asset classes and indexes without using real money. This is a great way to get a real feel for how the market moves. It can also help in testing out the tools that are offered by the options trading platform.

Quieting the Naysayers

There are some who feel that binary options trading platforms are simply gambling sites, based on their alleged negative cumulative payout, as well as because they require little or no prior knowledge of the stock market in order to begin trading.

However, it is important to note that most of the reputable binary options trading platforms will require users – prior to making any type of trade – to sign a “Terms and Conditions” document. This document outlines information regarding the particular types of risk that traders are likely to face when trading in such a market.

The Bottom Line

While there are numerous “experts” and advice givers who may offer cheat sheets when it comes to trading binary options, the reality is that there is no “secret” to these types of transactions. The bottom line is that success with trading in the binary options market is really about taking the time to study and analyze the correct information.

This includes becoming familiar with the tools that are available for trading these options, doing the necessary comparative analysis, and asking questions of trading platform customer service representatives as well as other successful online binary options traders regarding their experience and how they achieved success.

Once newer binary options traders become more familiar with the overall process, it is also wise to test out particular trading strategies in order to see what the outcomes will be. In addition, finding and working alongside an experienced trading mentor can also help in teaching both new and experienced binary options traders the ins and outs of this market.

Unlike using exchange traded option strategies, when traders engage in the trading of binary options, the profit is typically designed to be a fixed amount of return. This is especially the case if the option reaches its expiry being in-the-money. When binary options reach expiry without any price movement at all in the underlying asset, traders will usually receive the amount of their investment back.
In some cases, binary options trading platforms may even pay out a small amount of return to the losers, making binary options a form of financial trade whereby there is a high payout for traders that have success, and nothing – or near to nothing – for those that lose.

Prof. Binary’s Trading Tip: Did you know that not every broker offers a bonus when you deposit money? You have to be very careful and can’t expect to get bonus money everywhere you want. This is especially true since Cysec does not allow their brokers to offer deposit bonuses any more. So you had to look for a non Cysec broker (something we cannot recommend).

What are Bonuses on Binary Options Trades?

Because there are many binary options trading platforms coming into existence, there is a great deal of competition in terms of enticing traders to use these entities. Therefore, many trading platforms have turned to offering some type of incentive or bonus to traders when they open an account.

Some examples of bonuses include giving a trader a certain dollar amount or a certain percentage of funds over and above the amount that they have initially invested. For instance, some bonuses range between 25 and 50 percent of a trader’s initial deposit. Typically, the amount of bonus that a trading platform may offer is capped at a certain maximum limit.

Why are Bonuses Offered on Binary Options Trades?

The offering of bonuses began in 2006, when Forex trading platforms began to offer additional funds to traders as a way of getting – or keeping – them with the particular trading website. Since then, the practice has become common among many different investment and trading sites.

In addition to the enticement of new or existing users to trade – or continue trading – on binary options platforms, the offering of bonuses can also help these platforms in increasing their capacity to operate in the market.

This practice essentially allows the trader to use an amount of money that he or she would otherwise not have available to put towards their options trades. Therefore, with the additional amount of funds to be used, traders have the potential to drastically increase their payout, while also creating business for the trading platform.

This practice can literally help a trader to create even more potential profit opportunity if they generate commissions that are either equal to or more than the bonus that they are offered. In addition, these bonuses can essentially help the trader in developing an entire options portfolio.

How Traders Can Receive Binary Options Bonuses

There are numerous opportunities for traders to capitalize on bonuses that are offered by binary options platforms. First, one of the very best times to obtain such a bonus is when a trader opens a new account.

In addition, platforms may also provide bonuses to traders when the market is going through a particularly volatile session. In doing so at this time, the trading platforms are technically showing the potential advantages of the binary options market, while at the same time allowing traders to take advantage of the potential for profit opportunities during particular market swings.

With the rising popularity of options trading over the past few years, a number of new binary option trading platforms have emerged. These platforms are essentially web-based entities whereby users can make trades in real-time, with the intention of profiting via correct, short-term price predictions regarding the direction of an option’s underlying asset such as a stock, index, currency, or commodity.

As of early 2012, it was estimated that there were approximately 90 such platforms, with more on the way. These trading platforms generally provide standardized short-term binary options that have a pre-determined profit or loss and that may not be liquidated prior to the options expiry.

Profits can often be in the range of between 61 and 85 percent when using options that are in-the-money when they expire, and weekend binary options trading can offer the potential for traders to profit as high as 400 percent. In addition, traders are typically not required to pay a trading commission for use of these platforms.

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How Binary Options Trading Platforms Work

The trading of binary options can be learned quickly and easily – therefore, even those who are beginning traders can place trades and potentially make a profit within a short period of time. In using the services of a binary options trading platform, a trader will first be required to decide whether the option’s underlying asset will be at a price higher or lower at its expiry in relation to its price at the time of the option purchase.

Once a trade is placed by a platform user, the trader will then set what is referred to as the “spot price” of the underlying asset. This will in turn become the “strike price” of the option that they have chosen. It is after this that traders will begin to monitor the possible up and down movement of the underlying asset’s price.

Should the price of that asset close above the option’s strike price, the option will be considered to have closed in-the-money, and the trader will profit. Even if the underlying asset’s price remains the same as its price at the time of option purchase, the trader will receive his or her money back.

Other Platform Amenities Offered

In addition to offering an arena for binary options trading, platforms oftentimes will provide other helpful amenities such as trading tutorials for beginners and advanced traders, as well as customer service representatives who are available to answer questions and provide assistance via phone, email, and/or online chat.

With today’s high demand for convenience and trading-on-the-run, some binary options platforms have also begun to offer smartphone and mobile device applications that allow traders to access their accounts, monitor their positions, and even make trades from the palm of their hands.

Advantages of Using a Binary Options Trading Platform

There are numerous advantages to using binary options trading platforms. Certainly, the ability to profit is one of the top benefits to using these sites. Additionally, binary options trading platforms can make trading quite simplistic.

Binary option trades can be made with little or no knowledge of the stock market, and investors must only choose whether the price of an option’s underlying asset will be higher or lower at the time of their chosen options expiration.

In addition, unlike the Chicago Board Options Exchange and other large exchange related binary options providers, the smaller binary options platforms will typically not charge any type of direct fee or commission from their investors when they are purchasing an option. This commission-free attribute can make trading on these platforms quite appealing.