Binary options trading is legal in the United States and elsewhere in the world. In the US there is Nadex, which is a Chicago-based derivatives exchange for the retail investor that offers binary options. Nadex is a regulated exchange by the Commodity Futures Trading Commission (CFTC). The Chicago Board Options Exchange (CBOE) and the American Stock Exchange (AMEX) also offer binary options on stocks that you can trade through your existing broker; however, the commissions are generally higher.
Other platforms that offer binary options are over-the-counter (OTC). This is where the platform provides the instrument and allows their customers to take either side of the trade. These brokers are generally cheaper for trading binary options as they don’t charge commissions. For every customer that buys a put, another customer buys a call. The platform is just the middle man and makes the spread between what is paid out to the winner and the loser. The house does always win, but they are not trading against their customers.
Well if this is the case, why does binary options get a bad reputation and some say that it’s a scam?
The most common reason for this comes from people that traded binary options that lost money. The same can be said about people that have traded forex or stocks or played poker and lost money. They all say the same thing – it’s rigged, manipulated, etc. It’s all sour grapes. Those people lacked the discipline and skill set necessary to be successful. The key to being successful in any endeavor is to have a strategy and stick to what you know. Don’t try and trade everything. If you know and like gold, stick to gold. Know everything about gold and become the best gold trader in the world. It takes knowledge and hard work!
With all the platforms out there, how do I know which ones are legitimate and who to trust?
That’s where OptionsGain comes in. We review and verify the platforms that we recommend. We’re binary traders, so we like to use several platforms as not all platforms offer the same assets. We want to be sure our money is safe and with the right broker!
What research can I do on my own after I’ve read your reviews?
Call the company and talk to them. The brokers we recommend all have customer service numbers that you can call. Talk to them and get a sense of their knowledge of the industry and the stock market in general.
Check the trading website. Building a platform is not cheap and if a company has a cheap looking website, they probably haven’t invested the money necessary for a first-class platform, nor first-class customer service.
Start with the minimum investment. If you have $25,000 to invest, don’t send the full amount. Start with the minimum and test the platform and the broker. Do the trades go smoothly? Execution and payout are critical. You wouldn’t buy a car without test driving would you? Do the same with your binary options broker.
Furthermore, we advise that you only trade with money you can afford to lose. There is a risk involved that your trades may not go well. Be sure to have adequate cash reserves that you can last in the business. Many traders fail simply by being under-capitalized.
Lastly, trust your instincts. Determine if binary options trading is right for you. It’s not right for everybody. For every successful binary options trader, there are several that fail. Trading anything can be risky, and binary options requires a lot of discipline and patience to be successful. We hope with our site that we can help you become successful trading binary options.
Disclaimer: OptionsGain – The company, employees, subsidiaries and associates, are not liable nor shall they be held liable jointly or severally for any loss or damage as a result of reliance on the information provided on this website. The data contained in this website is not necessarily provided in real-time nor is it necessarily accurate. OptionsGain bears no responsibility for any trading losses you might incur as a result of using any data within the OptionsGain.