Binary Options exchange promises to become a future in binary options trading. The whole industry is developing in various directions at the moment so we feel it is imperative that we cover all these developments. With binary options traders got an immense advantage because for the first time in retail financial trading everything became truly transparent in terms of returns and investment size. Binary options do not have leverage or use pips to calculate profits. They are called fixed returns documents because traders immediately know the returns they can get. Binary options investment also is very easy to comprehend, be it OTC or binary options exchange (we will come later to that), investment amount is what the trader invested and not more or less. So basically the whole idea of binary options is to make things simpler. See the brokers with simplest platforms below.
As any other type of option, binary options are essentially financial instruments based on some underlying asset. With binary options trading systems, traders simply choose the direction of the asset price, and depending on the binary options type, they place their trade, after choosing the asset, expiry time and the amount they want to invest. After that, all they need to do is wait for the binary option to expire and for them to see if it ended “in the money” or “out of the money”. Naturally all binary options traders want their binary options trades to end in the money. In order to ensure most of your trades end in the money, visit FBO Academy for all the important education resources.
Binary Exchange – Scams as innovation incentives
There are many reports out there that binary options trading is actually a scam. There are many reasons for people to think this. We can divide them into three groups. The first group includes people who think binary options are a scam at its core. The second group includes binary options traders who think they have been scammed by a binary options broker because they cheated. The third group is the group that is in our opinion the one that is right. The third group of people who think binary options are a scam are people who have been really scammed by an unethical broker. Many people were, but most of them understand it is about the company and not the whole industry. See our blacklisted brokers section for more info on brands that one needs to avoid.
Problems of conflict of interest between traders and broker
The first group does have some valid concerns however since OTC binary options brokers, as opposed to binary options exchange trading, have an inherent conflict of interest in their role. In one side, they provide liquidity to the market, but they take the other side of the trade meaning that they have interest for a trader to lose. Binary options trading is risky, it is obviously risky for both sides. It is important for traders to understand this. Many binary options traders do not understand this and this is how group two comes to life. People think the mere fact they were scammed because they lost. This is why every broker must make sure traders understand this fact. Sometimes group two is wrong but sometimes right. French regulator AMF is warning traders that they should beware brokers who claim there is no risk. We agree there is always a risk, and traders must understand this!
Third Group is the group we try to help on Fair Binary Options. People who had bad experiences with binary options brokers for various reasons. They have experienced many ways scam brokers operate. Some automatically award bonuses that come with strings attached. We have reported on circular about bonus conditions (click for more info), that was sent by the EU, Cyprus-based regulator CySEC. Also, some brokers do not want to let traders withdraw money while others are on the border of legal behaviors, but in any case unethical, when they use hidden T&Cs clauses to lock traders’ funds. Trade only with trusted brokers from FBO list to avoid these problems – 24option is one of the biggest and most recommended brands.
Because all these things happen, many have labeled the whole industry as a fraud. Fair Binary Options believes this is not true, however, we are not in denial that there are scam brokers and this is why we try to act in customers’ best interests if this is possible. With binary auto trading, these problems are getting easier to control, however, the same trust issues reappear. Many have asked is there a more fair approach to this. The answer is yes. One way is to use regulated brokers in Europe. Traders can use these services from such entities in order to get some guarantee their business has been thoroughly checked and these are not binary options scams. This is however not a guarantee always, and this is why many traders still come to our site for best info.
Binary Options Exchange – Platform Design
It seems that another trend is emerging now. It is the appearance of binary options exchange markets. This is a type of binary options service provider, call the brokers, that organize platforms for trading as binary options exchange market. The key is that binary options exchange works in a similar, but yet different way than regular binary options broker platform. Here, we will try to explain issues surrounding binary options exchange design, operation, and regulation.
Regulation of Exchanges
When it comes to regulation of binary options exchanges, the area is divided between the US and the rest of the world. The US regulators, such as CFTC. support and approve binary options exchange markets, while European regulators such as CySEC basically could accept both, but were traditionally strongly supporting the OTC types of binary options. Other European regulatory authorities are CySEC, BaFIN, FCA, CONSOB, ASIC & FSB. Read more about Binary Options Regulators.
Now, with this new trend of binary options exchanges, we hope the tide is turning toward first global binary options brokers, that run binary options CFTC approved platform, such as the ones SpotOption has been introducing with Cantor Exchange and other US brands recently. Binary options exchange markets and related platforms are the entry to the US market, without reliance on offshore brokers, that in many cases offer good services, such as Magnum Options or GOptions, but are not regulated.
Trading on a Binary Options Exchange
As we already mentioned, binary options exchanges are still starting to appear all over the globe. Their main advantage is the fact they do not contain conflict of interest, but they set traders against each other. Each trader on the binary exchange must take a position, and another trader must take the other side. This way it is different perceptions of the future direction market will take, that are driving the exchange. In some points, this may cause liquidity drain if many traders offer to many binary options that cannot find a different handle. However, as we will demonstrate, there are mechanisms binary exchange operators are making sure liquidity is abundant.
Featured Binary Exchanges
For now, on Fair binary options, there are three exchange-based binary options brokers, but only one of them accepts customers while others are still developing.
First one is TradEqual Exchange, that can be considered first active and real binary exchange. They accept customers from all over the worlds, except the US citizens who can still trade on Nadex. TradEqual is an innovative platform that enables traders to chat, comment and help each other while trading. Our TradEqual review also showed that this platform enables traders to sell and buy placed trades that can be completely customized.
Second one is FairTRADEX. This binary options exchange is promising a lot, and we are waiting to see what they have to offer yet. All we know for now is that they will offer customers to chat, to follow other traders’ progress and to create their own options. We have also reviewed NADEX..
Trading on Binary Exchange
Just like brokers, the binary exchanges are always unique. There are no two of the same kind, and little differences are always there so make sure to carefully examine every exchange platform before investing.
NADEX Exchanges Trading
NADEX provides a very user-friendly environment for binary exchange trading. It is popular not only among US traders but also among Europeans who are longing to try American style of binary trading. Despite the fact that NADEX is an exchange platform the trading interface is very similar to usual binary platforms. This is important as traders can easily adapt to new way of trading in a familiar environment.
All assets and trading possibilities are listed on the platform that provides great overview. Trader only has to select his preferences and place a trade. As NADEX is CTFC regulated, it ensures regulated and safe trading environment for traders all over the world. Traders can also find useful charts that will provide best analysis tools available on the market. More about NADEX exchange trading find here.
TradEqual Exchange Trading
With TradEqual, the process of getting started is really simple. First, traders have to register and make the initial deposit. Those who use credit cards can start trading immediately while those who opt for bank wire can wait up to 3 days till the transfer is done. Then, the trader has to make a decision – what asset do they want to trade (for example, BMW stocks). As the trading platform is easy to navigate, there are no difficulties in achieving this.
After that is done, traders must decide whether they want to trade call or put, or maybe buy an option from another trader. Then, traders can set expiry time, and chat with other traders. The chat room is visible in the bottom right corner of the trading platform so make sure to use it even before trading. It is always good to know what other traders are thinking and what are their opinions on the current situation on the market. It is important to note as binary options are being written, the other trader can take the other side of the bet. This makes TradEqual a true binary exchange in every sense.
With TradEqual possibilities are endless, and traders can easily get used to the platform, all features, and tools. On the right side of the platform, traders will find a useful tool ready to use for analysis of the market movements. With TradEqual, trading process is completely adjusted to traders’ needs.
It is obvious the trading process with binary options exchange, is not complicated at all. We believe many traders will decide to try this way of trading, however, the OTC binary options broker will probably have a lot to say in the future as the advantages coming from signals and auto trading possibilities shape the binary options industry landscape in the near future, as well as in the long run.