Binary Options In The Global News
By: Markets The World Ltd
The dichotomy between whether these are truly investment products at all or simply bets with fixed odds and fixed returns is finally being settled once and for all. It appears that MarketsWorld got it right from the outset that binary options should be a fixed odds betting regulated product and not considered a financial or investment product at all.
However whether you consider it an investment or a bet, the main concern is whether the customer is being dealt with in a fair and equitable manner. The real issue centers around what if any protection is given by the regulator to the trader placing the binary options trade. Would a trader rather turn to a Cypriot or British regulator when they feel an online binary platform operator has mistreated them? Would they rather have their funds secured in Cyprus or the British Isles?
MarketsWorld.com was the first purely binary options company to get regulated achieving its regulation in the tough and scrupulous British jurisdiction of the Isle of Man. The Isle of Man was white listed as a jurisdiction by the UK which is a marker for total propriety, appropriate regulation, and fair treatment to end users.
There are two main types of high risk - high reward financial betting products now available on the internet. Both involve betting on whether or not indices such as the Dow Jones or commodities like oil or gold will go up or down over a certain period of time ranging from 60 seconds away to the end of the month.
The first is called 'spread betting'. Here, your return is based on how much the market rises or falls. So for instance, you could bet $10 for every point gold moves. If it goes up 100 points, you win $100,000. However if it went down 100 points, you'd lose $100,000.
The second newer method is binary options which makes everything much more straightforward and simpler for the trader who knows at the time the bet is placed the time frame involved and the exact amount the trader stands to gain or lose on the trade. In other words you can control with more certainty how much you stand to win or lose.
Neither spread betting nor binary options are for the faint of heart. These are high risk, high reward and are an exciting betting environment compared to the more traditional ways to play the world's financial markets.
In the UK alone it is estimated that 125,000 people are trading online either through binary options, spread betting, contracts for difference, or on strictly forex. These people do not consider themselves gamblers but rather traders. A gambler is someone who plays blackjack or the horses whereas betting on the markets allows the trader to make an educated guess based on world events and news, not simply hope for a favorable card to flip over, a lucky roll of the dice, or a particular horse to come first.
Although they are called binary options. This has always been a bit of a misnomer. A real option bought on an exchange would pit a buyer against a seller of the option itself. Like the online binary option, a real exchange traded options contract depends on the fluctuation of the price of the underlying asset. To see this illustrated very well one can just google how a real gold option works. Gold is just one example, you can buy an option on any tradeable financial instrument such as gold or the FTSE 100.
The digital age has brought along with it many advances and conveniences such as smart phones and internet shopping from the comfort and security of one's home laptop computer. One such advancement truly is the so-called online binary option now being available. There are some drawbacks but there are also a lot of benefits.
For example, most binary firms allow traders to place trades of as little as $1 and make deposits of $10 without any fees or commissions. The binary firms themselves absorb all the transactional costs to receive the money by debit or credit card and to pay the money back to successful traders directly to the same card used for making the deposit. So convenience is clearly there.
With a traditional exchange traded option, one difficulty is that you need to find someone on the other side of the transaction over an exchange who is prepared to take the other side of the option contract. A second difficulty are the exchange fees usually 5% or a fixed fee per transaction around $50. And a final bar to entry is that you usually need to be trading with quite a lot of money, say at least in the range of$1,000 per option contract, particularly when you take into account the $50 or so you will pay to the broker who brings the seller and the buyer together.
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Page Updated Last on: Dec 22, 2016