Binary Options Trading Review

In July 2008 Binary Options trading started grabbing the attention of brokers and traders alike when it was listed by Chigaco Board of Options Exchange (CBOE). Before this time binary or digital options had been traded by large banking institutions and investment houses. One such example is IG Markets who claim to have created Financial binary betting in 2002.

Within a year of the CBOE listing binary options trading for the S&P 500, seven new binary options companies developed or launched specially made trading platforms. By 2009 binary options began to cause a stir amongst the trading markets as more and more traders began to get involved with this new style of trading, known as financial betting.

To some trading binary options seemed more like an unskilled game but the more developed the platforms became by offering resources like charts and trading tools the easier it was to see that this financial game had been underestimated.

So how do Binary Options work?

A trader places a bet on whether an asset such as the EUR USD will have moved up or down by a specific pre determined expiry time. If the trade comes off “in the money” ie. the trader has predicted the price movement correctly he will win a fixed payout which is know to him before the takes the trade. This means that he will know exactly how much profit he can make or indeed lose from every trade he makes.

The picture above taken from the AnyOption platform shows an example trade for a stock of RBS. The expiry time of this trade is 14.30 today. You can either “call” or “put” meaning predict the price of the trade will go up or down in value by the expiry time of 1430 pm. The picture also shows you that if you are correct you will receive a payout of 71% on your money, not a bad amount of return for a one hour trade.

Most binary options brokers on the web offer trading of many assets across Commodities, Forex, Stocks and Indices. A professional trader can follow a specific currency pair or stock very closely and become an expert in it’s patterns to help him make an educated trade. Binary options or digital options trading is also suitable for absolute beginners who can make a prediction based on the charts offered by the platform he is trading on.

The picture above shows you how the chart for the FTSE 100 appears over the last hour. There is an overall downward movement to the chart with a rally beginning at 13.35. If we compare these charts to the news we can look out for announcements or news released by the FTSE 100, which might affect the chart over the coming hour. We can also look back further in history to build up a bigger picture of the movement of the FTSE 100. All of this knowledge of course, helps our binary options strategy.

Binary Options Brokers have made binary options trading a simple science to understand and have given a safe environment for newbie traders.