Trading in binary options is becoming increasingly popular, although this is still a young form of trading compared to other financial instruments. In addition, many providers - so-called brokers - of binary options only operate on the Internet. This circumstance also helps newcomers to the question, how serious is such a brokerage provider at all? And what does a newcomer have to look out for in order to identify a reputable broker? In this guide, we provide information on what binary options are and what factors characterize a reputable broker. We also want to clarify how to find a suitable broker.
Everything important at a glance
- With binary options, traders bet on rising or falling prices.
- Maturities are usually between 60 seconds and one year.
- Generally, returns of between 65 and 85 percent can be achieved - with special types of trading this can range up to 400 percent.
- Transparency, Accessibility and clarity in the presentation of all services and conditions make a reputable broker.
- Open brokers should also inform about the official regulation.
- Broker comparison protals support the selection of the right broker.
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What are binary options?
Binary options also become digital options Called. This is because binary options generally only lead to two results. Either the option is "in the money" or "not in the money". The principle of binary options trading is simple compared to other trading activities . Traders have to set solely on falling or rising prices . By purchasing so-called call or put options you decide on a direction. If the trader buys a call option, he assumes that the price of the underlying of a share, index, commodity or a currency pair, increases when the option expires. In contrast, put options reflect the assumption of falling prices. If the trader has made the right decision and the price has developed as he predicted, he will be "in the money" at the end of the option period. The profit margin is usually between 65 and 85 percent. In addition to call and put options, traders also have other trading types with binary options, with which even returns of 100 to 400 percent can be achieved.
But this is not the only thing that makes ease of use binary options attractive as a trading instrument. Binary options can usually be traded from a low stake of a few euros. The so-called leverage makes it possible to generate high profits with a low capital investment, because it is not necessary to buy the entire underlying here. How the CFD lever and the Forex lever work can be read in our respective guides. But be careful! Trading with levers holds high returns, but also the risk of a total loss. The risk of loss in binary options is limited to the capital employed and many Providers pay back up to up to 15 percent if they lose.
How As already mentioned, trading binary options, which always involves risk, depends on how the price behaves at the end of the term, at the so-called expiry date. Traders can usually choose between maturities from 60 seconds to a month or even a year. 24-option 30-second trading is no longer available, but has made shorter maturities possible.
To trade binary options means, in the best case, to generate high returns with minimal capital investment - often from just one euro. The trader forecasts the course of the price at the end of the option term. Will the price have fallen or increased on the expiry date compared to when it started? The trader can often choose maturities from 60 seconds.
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What factors speak for the seriousness of a broker?
Binary options brokers are now many and most offer their services exclusively on the Internet. Furthermore, many brokerage providers are based outside of Germany, which understandably raises questions. But how can a beginner in trading distinguish serious from dubious brokers ? What characterizes a serious broker?
Basically, it is important to ensure that the broker displays all of its services, conditions, trading instruments and trading opportunities transparently. It also speaks for a broker if he provides detailed information about the company history or his experience and above all about the official regulation. Another indication that a binary options broker is reputable is the offer of extensive and German-speaking or multilingual support, who is helpful to you with technical and formal questions. A reputable broker offers different communication channels. The language selection on the website and the trading platform, which should also not be very different from other platforms, is not insignificant when evaluating a brokerage provider. uncomplicated and simple usability are also hallmarks of seriousness. Brokers who work seriously also invest the trader's money separately from corporate money and deposit it into separate accounts. Risk warnings and the general terms and conditions should be easy accessible, immediately visible and detailed. The same applies to all costs and fees. The spreads should be appropriately designed and individually.
Serious Binary options brokers are also marked as follows:
- official regulation within the EU and reference to
- free and extensive webinars and / or seminars
- offering a free demo account
- Offer of risk management tools
- Disbursement conditions are clearly stated
- Fees and costs can be viewed transparently at any time
- Reasonable amount of the minimum deposit from around 100 euros
- Costs for individual trades from an average of 10 to 25 euros
In principle, it can be said that most brokerage providers are also serious brokers. For newcomers to the trade, there are a few factors to consider when choosing a broker. In principle, there are hardly any significant differences between the brokers regulated in the European Union. The fact that the terms and services vary between providers does not represent a quality defect. Transparency, risk warnings and moderate costs and fees indicate a reputable binary options broker.
How to choose the right broker for you Find binary options
The offer on the Internet to brokers for binary options and other trading instruments is large and varied. Like the right choice of a broker can be found here and in our guide "Broker selection":
- Selection of training programs: Before trading with binary options, thorough information about technical terms and corresponding providers must be obtained.
- A binary options broker comparison saves time and helps with the selection.
- The offer of demo accounts should be available free of charge for training with binary options.
- The demo account should also be available in Can be tried out in real time and under real conditions.
- Parameters that are important to the trader are to be defined: minimum deposit, bonus, amount of assets, trading types, trading platform, apps and much more
Relevant comparison portals, such as this page, on the Internet are important support when choosing the right or suitable broker. This is where traders get general information about binary options and how to trade. Furthermore, specific services and conditions of the respective broker are closely examined. The opportunity to test the platform itself and corresponding trading strategies with a free demo account should first be an essential selection criterion when trading binary options.
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