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Binary Options Trading Platform

 
     
 

 

If you decide to have a swing at binary options, you need to choose the best options trading platform. Here is some advice to help you make the right choice!

When you have digested this, see my review of the optionFair™ binary options trading platform.
 

 
     
 
 
     
 
     
 
 
     
 
 
     
 

Since 2008, more than 125 web based binary options trading platforms have emerged in the financial markets. All of them are web-based, and typically very user friendly and commission free. Traders can profit from making correct predictions about the short term price movement of an underlying asset such as a stock, stock index (e.g. S&P) commodity or currency. Profits and losses are all pre-determined, and typically range from 60% to 85% for options that expire in-the-money, and losses are normally between 90-100% of the trader's investment.

Binary options trading has often been compared to gambling, because no knowledge of the stock market or its dynamics is required in order to make trades. However, traders skilled in short term technical analysis and news analysis can make profitable trades using the system. The simplicity of the system is what makes it so attractive, because a traders simply needs to know whether an underlying asset will gain in price, or drop, within the hour or few hours, and then place a trade based on that knowledge. Statistically, a trader needs to make correct decisions at least 55% of the time in order to break even or make a profit. Trades can be made for as little as $10.

One of the key questions with this system is: how to choose the best Binary Options trading platform from the many that are out there?

Choosing a Reliable Binary Options Trading Platform

It is really important that you do your own research and do not succumb to the hype given out by all the different platforms. While this sector comprises OTC (Over the Counter) trading, some platforms have submitted themselves to a code of ethics or to oversight to bodies such as CySEC (Cyprus Securities and Exchange Commission). Here are some pointers to consider when choosing a platform:

  • The platform should be based in Cyprus, because then it falls under the regulatory control of CySEC. In fact, many platforms are based there.
  • It should have a high trading volume
  • Clients should be trading against each other, not against the platform. This means that every call option should be match with an equivalent put option.
  • Price quotes on the platform should be from a reliable data provider, and should match the live quotes that you would see on any other stock trading platform.
  • Price quotes for calls and puts for the same asset, strike price and expiration time should be the same.
  • When a trader withdraws money from his account, the process should be completed within five business days.
  • Traders' money should be kept in a trust account, and transactions should be monitored by a third party.

Summary

Binary options trading is not an investment, but is rather trading or speculating on the short term direction of the market. It requires a lot of time investment in order to be successful, and the temptation to gamble or take short cuts with research is very high. However, with good technical and news analysis, it is possible to make a reasonable profit out of the process. One of the key factors is to choose the right trading platform , that not only provides fair trading, but also gives you access to plenty of news and technical information so that you make the best decisions about trading.

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