Binary Option Future with Increasing Brokers

Binary Option Future with Increasing Brokers

Submitted by adil on Mon, 02/11/2013 - 06:02

Binary options have been around for quite some time. Many people have taken this route since unlike the stock investment option where you are require to buy the particular asset at the market price, you are given a chance to trade based on the same listed companies’ stock but by not actually owning the stock. The fluctuation of the stock price is used to determine whether a binary option is gaining in value or not. Unlike the stocks, the binary options contracts which are based on stocks, Forex and farm commodities have expiry dates. The returns that one gets from the binary option are usually in the range of 70% of the invested amount but you can also lose all of your investment or get a paltry 15% salvage return on your investment.

The industry has grown in a tremendous way since the profits that one gets from the trades are fast. A normal trade will take one day and there are many more that have been introduced in the past few years that expire in one hour, 15 minutes or even 60 seconds. The returns involved in the binary options are so huge that an investor who started with $100 can end up getting a whopping $1,420 after 5 trades of 70% that is, they win all the five trades.

There have been challenges in the industry too especially in light of the humongous returns that one can get. Na�ve investors have managed flock into the industry but so has unscrupulous brokers. Well, much as binary option trading is not for everyone, it cannot be categorized under gambling since the investor has to analyze both analytical information as well as fundamental information relating to an asset before jumping in to a trade. However, some traders, rather than using the established financial sources of information like the Reuters to quote the closing prices, they use their own. You might not be surprised to find that while Reuters quotes the closing price of Google is $100.1256, a rogue broker states that it is 100.3254 which are not even live. This seemingly small difference could mean you losing all of your investment in that trade.

The other perennial problem that many investors have complained about and which holds water is the fact that whereas the�binary option brokers�register in specific places� for tax purposes, some have done so to perpetrate grand scams. With the increasing number of disconcerted investors and others being robbed blind by a few rogue binary options brokers, the whole market which just a few years had a great sparkling future is headed for the dogs unless something is done to protect the investors.