Who are binaryoptions.co.uk?
At binaryoptions.co.uk, we try to provide: A full suite of services and information to anyone looking to get involved in binary options trading. Trading binary options is a unique investment tool. It offers a relatively simple method of profiting from price movement in the majority of major asset classes. It is a growing area of trading in the UK, and that is one of the reasons why we are aiming to provide the definitive guide to binary trading in the UK. Get in touch here.
Binary options trading
Although binary options trading is a growing form of investment, it remains a relatively unknown product. Over time, this is likely to change. As these options offer a very simple investment, where risk and reward is very clear at the outset.
A binary trade is a simple ‘yes or no’ outcome. For example, will a particular stock price rise in value? Or will an exchange rate finish lower? The up/down or yes/no outcome defines the ‘binary’ element. The only question beyond that is over what time scale the binary option is set for. It might be as short as 30 seconds, it might be a month, a year – or anywhere in between.
So binary options offer a simple trading choice, but they are also high risk / high reward.
If the trader is correct, they will see a return on their investment of somewhere between 70% and 95%, paid as soon as the option period has settled – perhaps within just a few minutes. If the market moves against them, they lose their full investment. There is however, no leveraged exposure with a binary trade, so the risk and reward ratio is also simple to manage.
Read some of our binary options guides to find out more.
Binary options – Finding the best broker platform
Binary options trading can be used in a number of ways, and across a huge array of commodities and markets. This means finding the best options broker, or the best trading account, really depends on the needs of the individual investor.
For example, some binary brokers may focus on forex (foreign exchange) binaries. Others may focus on commodities options and only offer a handful of forex markets. Likewise, the returns (or payouts) may differ between asset classes, and with these varying by as much as 25%, it is easy to see why this might be important when selecting a binary options account.
Investment limits may also point some investors either to, or away from, certain binary trading accounts. Some brokers offer minimum trades of just £1, while others cater for investors willing to invest £200,000 in a single trade. Again, when judging which binary trading platform is best, an investor will need to consider their own trading needs before deciding to open an account.
Some of the difficulty in making such a decision has been removed by the brokers. Most offer demo trading accounts. These allow new clients to try the services on offer, see if the range of markets and investment scales suit them and only proceed to a funded account when they are happy that the right trading account has been found.
Visit our list of demo trading accounts.
Trading binary options
Here at binaryoptions.co.uk we provide insight into binary strategies. We list the brokers and review their trading platform strengths and weaknesses. We highlight where demo trading accounts are available and offer a range of guides that cover the basics. In addition, we also cover more specialist subjects, like forex or trading signals.
Binary options reviews
Our broker reviews are written after genuine trading on each platform. They include all aspects of each broker – good or bad. Included are the important comparison factors such as the payouts, trading types, and minimum deposit requirements – but uniquely, our reviews also include any complaints we have received about the brand.
The credibility of the reviews is important to us, so they are checked and updated regularly and feedback we receive forms part of the overall rating. In order for binary trading to move into the financial mainstream, comparison services need to be open, honest and transparent – and that is what we try and deliver in our broker reviews.
Frequently Asked Questions
Below are some of the questions we are asked most often. Hopefully these short paragraphs can provide an answer – but if not, there are a number of links to more in-depth articles that will explain each subject area in more detail.
What is binary trading?
Binary options trading is, put very simply, the trading of ‘binary’ options. These options pay a fixed return if they are successful (referred to as “in the money”), but the full investment is lost, should the binary trade lose. Almost every asset class can be traded via binaries, including foreign exchange (forex), commodities, such as oil and gold prices, stocks and indices. Binary trading then, is the act of buying or selling these options.
What are binary options?
Binary option trading is a way for traders to speculate on an asset price. They payout a fixed return if correct, but the investment is lost if they are not. They could also be described as a fixed payout financial option.
This all or nothing structure is why the options are called ‘binary’. They are sometimes referred to as digital options, or fixed return options for the same reason.
Binaries can be traded ‘over-the-counter’ or traded on an exchange. They are generally traded over a variety of expiry times. These can range from very short periods of time (as low as 30 seconds) up to a year. They are a high risk, high return investment vehicle and will not suit every investor.
How to trade binary options
Steps to open a binary option;
- Identify the underlying asset to trade e.g. the price of gold, the Facebook share price or the GBP/USD exchange rate
- Identify the expiry time (The time the option will end). Times vary from under a minute, up to a year
- Decide on the size of the trade or investment
- Decide if the value will rise or fall
Binary options can be traded online. There are a range of brokers, all of whom will provide binary trading via dedicated websites and also across mobile devices. Some will offer binaries “over the counter”, others via an exchange – but they all follow the same process to open a trade.
These trading platforms will vary to a certain degree, but many will share common features. Most of these brokers will offer demo accounts, enabling potential new clients to try out their trading platform.
The steps above will apply at every single broker. As a trader gets more advanced, more layers of complexity can be added, but in essence, the attraction of binary options is in the simplicity, and ease of managing risk.
In terms of strategy, and how to trade binary options well – they are a unique investment. There are a number of strategies and trading styles. From technical analysis to fundamental research. Trader education will be key to any success in binary options. Our articles will hopefully provide both education and up to date news. Allowing traders to improve their results month on month.
Put option and call option
Put and Call options are simply the terms given to buying or selling an option. If a trader believes an asset will go up in value, they will open a call. If they expect the value to fall, they will place a put trade.
Some binary trading brokers will change their trading buttons every couple of seconds, from Call and Put, to Down and Up to avoid confusion. Others dispense with the terms put and call entirely. Again, most trading platforms will make it extremely clear which direction a trader is opening an option in.
Are binary options a scam?
Binary options are not a scam. There are however, binary options brokers and signal providers that are untrustworthy and operate scams.
It is important not to write off the concept of binary options, purely based on dishonest brokers. These scams continue to drag down the image of binary options, but regulators are slowly starting to get to grips with these operations and the industry is being cleaned up. If you want to complain about an operator, please let us know via our Contact Us page.
- “Make money online” or “Get rich quick” marketing. This is a huge red flag. Binary options are a high risk / high reward investment vehicle – they are not a get rich quick scheme and should not be sold as such. Operators making such claims are being dishonest.
- Cold Calls. Reputable brokers will rarely make cold calls – they do not need to. Cold calls will generally be from untrustworthy brokers. Tread extremely carefully if proceeding with a company that got in contact this way. This could include email contact.
- Bonus Terms and Conditions. If taking a bonus, read the terms and conditions. Some terms include tying in any initial deposit (as well as the bonus funds) until turnover requirements are met. The initial deposit is still the trader’s money – honest brokers will not lay claim to it before any trading has actually been done. The better brokers will also offer the option of cancelling a bonus if it does not suit the trader.
- Account Managers. Be very wary of any account manager wishing to trade on behalf of clients. There is an obvious conflict of interest anyway, but these managers generally encourage traders to trade with figures way beyond their means. Traders should be very reluctant to let anyone trade on their behalf.
- A trader must know their broker. Seems obvious – but some operators will ‘funnel’ clients to a brokers of their choosing, not the clients. If the marketing demands new clients sign up with a particular broker, or they pick the broker from a limited list – do not proceed. A trader should know the broker they are going to trade with!
Read more about avoiding scams here.
Being aware of the above methods should help those new to binary trading to avoid the less responsible brands. Improved regulation and more awareness will hopefully reduce these types of complaints. This will allow binary options to move into the financial mainstream – which is where they originated from.
What are binary options signals?
Signals are an alert, sent to traders, highlighting a trade that the provider believes will be profitable. They can be communicated via a range of methods – email, SMS or from a live signal website. Much of the irresponsible marketing associated with the scams listed above, is linked to signals. There are some very good providers out there too. However, in general, learning binary options is generally a safer route than using signals to compensate for a lack of trading knowledge.
Do binary options signals work?
Do signals work? – Sometimes, but rarely in isolation. Some providers will deliver a combination of education alongside signals and that represents a good mix. Traders must be able to fully assess a signal before they can judge the quality of them. So learning binary options is important. We explore these signals in more depth in our signals section. We also highlight some of the best providers.
How to compare the best binary options brokers
Our comparison table delivers a quick summary of the key points when comparing binary options brokers. Our detailed reviews then allow potential new traders to assess some of the finer points that might confirm their decision. Here is a list of some of the key comparison points for brokers;
- Over the counter or exchange traded
- Minimum deposit
- Minimum trade / Maximum trade
- Trading platform
- Asset lists
- Expiry times available
- Regulation (FCA, CySec, CFTC etc)
- Range of options available
- Bonus details
- Complaints / Customer feedback
Some points might be more important to certain traders than others, so finding the “best” will be an individual choice for each new client. Demo accounts are a good way to try a platform without any financial risks.
What are the best binary options trading strategies?
Binary trading strategies will be an individual choice. In our strategy section, there are ideas that traders might want to explore. Technical analysis might be of use to some traders, alongside charts and price action research. Likewise money management might be of great value to others. Again, it is a learning process to find the best methods in each case. Our articles should help.
Are binary options gambling?
It depends entirely on the attitude of the trader. If a trader applies no strategy or research, them any investment is likely to be reliant on good fortune. On the other hand, a trader making a well thought out trade will ensure they have done all they can to avoid relying on luck. Read our in-depth look at whether binary options are gambling.
What is copy trading?
Copy trading is a growing sector of trading. It allows users to copy the trades of others. Those copying decide how much to invest, and whether to copy some or all of the trades that a particular trader opens.
The traders being copied also benefit, as the broker will often reward these clients through commission based on the trade volume they generate.
Copy trading (or ‘social trading’) is a useful function for those people without the time or knowledge to trade themselves. When copying however, time and effort spent finding the right traders to follow will pay dividends.
Binary options robots
Robots are auto trading software or algorithms that allow traders to automate their trading. Users have a choice of how to use these robots. Often, they are ‘sold’ as an automated signal service. These type of operations however, see a higher level of scams than other areas. Any form of automated trading carries a high level of risk, and a large amount of ‘due diligence’ is required when trying to find the right robot service.
An alternative approach is for traders to build their own robots. A growing number of brokers now offer traders the ability to put their own trading robot together, using simple tools. These often allow combinations of technical analysis settings, that then open trades when those criteria are met. It has made binary options robots available to everyone. Read more about how to use robots.
Who regulates binary options?
Binary Options are regulated via a number of bodies. CySec regulate the majority of brokers based in Cyprus and Israel.
In the UK however, a stronger layer of consumer protection is available if a broker is regulated by the Financial Conduct Authority (FCA). Some firms also register with the FCA – but this is not the same as regulation, and is an important distinction.
In the US the CFTC have only licensed two brokers to operate there – Nadex and CBOE. Some firms are also regulated by the Malta Gaming Authority, or the Isle of Man GSC. For an in depth look at the history of regulation within binary options, read our article: Binary Options regulation.
Binary Option trading guides:
- Select a broker – Use our comparison tables to find the best broker, and either deposit funds or open a demo account.
- Select the asset or market to trade – Commodity, Stocks, Forex or Indices. The price of oil, or the Apple stock price, for example
- Select the expiry time – Options can expire anywhere between 30 seconds up to a year.
- Set the size of the trade – Remember 100% of the investment is at risk
- Click Buy or Sell – Will the asset value rise or fall?
- Check and confirm the binary option – Most brokers show a confirmation screen for traders to ensure the details are correct.
The binary trade has been placed!