World Wide Web at the moment have accumulated more than enough discussion about the nature of binary options. The diversity of opinions extensively from allegations of fraud to the lacrimal explicit vows that on the binary options, you can without much risk to make big money. And because it's time yet to shed light on what actually are these mysterious binary options. And that will be possible for the reader, the answer to the main question - whether they are a waste of your dearest possession.
To begin, it should be noted that those sites that advertise binary options, make it virtually always the same, with renewed energy illuminating the predefined list of positive characteristics.
At first glance, the mechanism of binary options trading is virtually identical to the trade on a normal financial market. The task of the trader, guided by its strategy and relying on some kind of intuition, try to predict the direction of the trend, which will allow to close the position at a profit. What are the companies that offer trading in binary options?
For starters, they offer a fairly simple interface with the controls by means of which a trader can carry out discovery transactions. For example, a trader invested $ 100 in a particular asset.
There is a «call» button, which means that a trader by clicking it and thus opening a position on the definition of an asset assumes that the asset will grow in value. And there are, respectively, «put» button, making it possible to put a drop in asset value.
In this case, the difference in trafficking Forex is that the open positions have a fixed time (60 seconds, for example, 20 minutes, etc.), after which they are automatically closed.
What are the conditions provided by the company for trading binary options?
For example, if a trader has put on the increase of the price of the asset, then, as soon as the pre-recorded time, the asset price should be higher than the initial one. In this case, the trader allegedly earn the amount of his income will be from 50% to 70%. If the price has fallen - the trader loses all the money, with which he opened this position.
That is exactly such a mechanism of trade appears to trading platforms specialized in binary options, as a basis. But in general, there are many types of transactions, which, in fact, stronger than the other do not differ from each other: for example, can be a little harder for a bet, stipulating that for a certain time of the asset reaches a certain point, and it would mean that trader "won". Well, and the like.
What is the meaning of the word "binary"?
The word binary - translated as "binary". Originally the term was born before the advent of the exchanges. When the two men entered into a deal with each other, the names of such contracts were - binary.
What was the essence of such an agreement?
It would be useful to explain a specific example. Imagine a situation that, for example, there are two participants, let's call them A and B sign a contract, the essence of which is as follows:
1) A Member undertakes to grow a specified number of wheat and put it in the stipulated terms PARTIES;
2) The participant Responsibilities included at the time of signing the agreement to provide A certain amount of money, which is called the "prize."
What is the point of such a transaction for both parties?
A participant immediately receives the money for another neizgotovlenny goods, and he has the opportunity, based on their experience, to ensure that the production cost of the goods is lower than the amount received from the buyer W. And the difference will his earnings.
For participants in the same interest in the following: it assumes that the value of wheat at the time when it is made to rise to, say, 50%, and B, sell it, eventually having its profit.
It is clear that in practice a little harder. Because at the conclusion of the transaction, there are plenty of different secondary obligations, conditions and so on. And often it happens that one of the parties fails to fulfill its obligations. And here comes into play exchange that serves as a sort of state regulator, guaranteeing performance of the contract, in the opposite case, the exchange compensate the losses of the victim (one might even say, "cheated") side.
In the early days of binary options trading is likely to have invested in this concept are very simple: the trader is betting either on increasing the value of the selected asset, either on its slide. But by far the majority of these companies have different interpretation of this kind of trade.
What is the difference between the forex market and binary options?
Even so seemingly can catch the differences of binary options on the market Forex . Like in the first and in the second case we are talking about one and the same - the opening of transactions a trader actually puts their money on what they selected asset will either fall or rise in value. But almost immediately obvious presence of a number of differences.
In the case of trade in the market of the Forex , unlike the binary options, the trader opens a number of possibilities. It can decide what size possible loss he is willing to lay, and independently determine the relationship between the potential profit and loss, for example, 1: 5 or 1:10, and the like.
In general, the Forex market is characterized by quite a high level of expectation. What can not be said about binary options, where on average or, especially, a long period of time to earn virtually impossible, as the potential loss is always 100%, and the possible earnings is always limited to the approximate range of 50 to 70%.
Even in the market Forex has the ability to trade with the so-called Carry Trade credit, the bottom line is that for each day until the position is open, the speculator is rewarded with a certain percentage, which can be compared with bank deposit. But unlike a bank, there are no restrictions on the withdrawal of money, money can be removed at any convenient time.
Summarize and write, what are the advantages of trade in the market Forex as compared with trade in binary options.
Firstly, as mentioned above, in the Forex market is a very good level of expectation.
Secondly, the presence of various tools facilitating even greater earnings as well, for example, Carry Trade asset.
Thirdly, the fact the trader has complete freedom of action, and most importantly - there is no limit on the time the position is closed, as in binary options trading. An open position, for example, at some point, you can see the drawdown, but still at the same time expect its profit. And in this context it is necessary to remember about such a concept as "stop-loss". This is a special order, to some extent protects the trader from excessive losses.
It is also important to get acquainted with these facts:
Authoritative Israeli edition of «The Times of Israel» repeatedly to acquaint its readers with a series of evidence that binary options are basically cheating.
The US Commodity Futures Trading Commission, which controls the observance of the Exchange Act has not once made public appeals to traders not to take seriously the promises of brokers that provide the possibility of trading binary options. Referring to the fact that the percentage of customers who lost money to exceed all reasonable limits, indicating a total deception.
At the same time several other US state regulators have noted that in the US there is no legally registered company engaged in trading binary options, which suggests that these companies conduct activities incompatible with the performance requirements of the law.
ISA - it is the regulator of Israel issued an official ban not just on trade binary options in 2016, but even on any advertising materials for this activity. In fact you can not even mention such a phrase as "binary options".
But the Canadian regulator, IIROC, firstly, informed that in the country as well as in the US, there is no legally registered brokers that provide the ability to trade binary options. And secondly, it is clearly said that even if the trader allegedly profit will be, it will, with probability 99% will remain as virtual numbers. Cashed it simply will not work.
The United States Securities and Exchange Commission, the supervisory authority, even published something like a manual, describing in detail all sorts of fraudulent tricks of companies offering trading on binary options.
In concluding, I want to focus here on some thoughts. For the full development of the market, including the need to create conditions of maximum transparency and eliminate even hints of any possible deception. Because Forex is very important to start your way to the right to trade was the most transparent and profitable. Open account with Weltrade and start earning now!
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