Binary Option Trading vs Forex trading: So what’s the difference?

bo vs fxThe story of binary options trading started back in 2008 when U.S Securities and Exchange Commission approved it. On the other hand, Forex trading has been around for way longer, more that 40 years already. Forex is the largest financial market with high liquidity and as much as $5.1 trillion is traded on it every day. This trading is based on currency exchange, while Binary options are based on the price movements of various underlying assets such as commodities, indices, currency pairs, and stocks.

So what are the main differences between these two types of trading? Let’s find out!

24 Hours Open Market

One noticeable difference is that the Forex market is open 24 hours a day, 5 days a week, whereas binary options market is open only during the business hours when the underlying asset market is available. With binary options, you have to be a bit more patient and organized in regards to the time you are planning to place your trades.

Leveraging Support and High Liquidity

Binary options trading lets you trade only the balance that you have on your trading account. This way, you are more in control and cannot lose more than you have invested.

 

Transaction Costs

When trading Forex, a trader has to pay brokers. It comes either in the form of commissions for each transaction they make, or spreads or even both. When trading binary options, there are no brokerage fees or commissions for each trade. I

Asset Choices

When trading Forex, a trader is limited to just currency pairs and you can not choose trade any other assets. With binary options trading, there is a wide range of underlying assets to choose from. We have already mentioned currency pairs, market indices, and commodities such as gold and silver, etc.

Social Trading Support

What is to the great advantage of binary options trading newbies is the opportunity to do social. Any trader who is new to the binary options market and doesn’t have much expertise or market knowledge can start trading binary options. All he needs to do is to simply join a social trading community and copy the win trades of more experienced investors.

On the other hand, Forex trading requires a lot more expertise and market knowledge. Forex brokers do not offer social trading support, so it’s difficult for total beginners to explore Forex market without already having some trading expertise.

Conclusion

When talking about the difference between binary options and Forex trading, a trader has to understand those very important differences and the amount of market expertise that they have. There are many pros and cons to both trading systems. Educate yourself about the differences between them and choose the one which suits your trading need and understanding of the market trends. For beginners, we would rather advise choosing binary options since you can take advantage of social trading to work on your trading skills simply by copying another experienced investor techniques. In addition, binary options are easily accessible to the general public and the risks here are limited. This can all be a great advantage for new traders.

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TOP Regulated Binary Options Brokers 2017

There are many ways to call them: licensed, authorized, regulated. Whatever term you prefer, those are definitely the brokers you want to keep an eye on.

At the moment, there are around twenty binary option brokers that are regulated by the Cyprus Securities and Exchange Commission (CySEC). Since Cyprus is one of the European Union members, its license is generally accepted by other EU countries. Australian brokers are licensed by the Australian Securities and Investments Commission (ASIC).

NB! No traders from the USA are accepted by CySEC or ASIC regulated binary options brokers.

Let’s look at some regulated brokers that have proven to be a good choice for our traders over the years and are our TOP choice in 2017!

TOP Regulated brokers

24option broker Review24Option is regulated by CySEC (license #207/13). Since its establishment, the broker won numerous awards such as Best Binary Options Broker 2014 award, Best Binary Options Broker 2015 award and Most Innovative Broker 2015 award. Read the full review here.

HighLow broker LogoHighLow is regulated by ASIC Australia (license #364264). Since its foundation in 2014, this is one of the best brokers for the Australian, African, Middle-Eastern and European options traders. Read the full review here.

bdswiss logo broker

 

BDSwiss is regulated by CySEC (license #199/13). One of Europe’s largest binary options brokers and also one of out readers’ top choices. Read the full review here.

 

AnyOption brokerAnyOption is regulated by CySEC (license #187/12) and by FSB in South Africa (registration number FSP 42020). Established in 2008, it was one of the pioneers in the industry. Read the full review here.

Choosing the Right Broker for You

Even though selecting the right broker for you is only half-way to success, it’s already a very good start. By carefully studying reviews and signing up with a regulated broker that matches your need, you are already doing a lot for succeeding in binary options trading! Consult the full broker list below.

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Japanese Binary Options Volumes Reported to Rebound in January 2017

The Financial Futures Association of Japan (FFAJ) has published a report announcing the official figures of the last month of January for its over-the-counter binary options. It showed an excellent elevation point for Japanese binary options industry that gone back to the strong trading volumes of January 2016.

Looking at the graph below, one can see from the statistics data that in the beginning of 2017 Japanese binary options market maintained the positive trends of 2016 and it kept the up and down trend that started at the end of last year. In 2016, November was a volatile trading month that reflected turbulent events around the world.

Japanese trading volume 2016-2017

Making conclusion from these figures, the FFA had its total trading volume result in $369.8 million this January, which is an increase of 2% since December 2016. But overall, since the same time last year the decrease is about 33% which is rather a lot. But the figures are showing steady growth and there’s a hope of them reaching that high number again very soon.

Check out our 24option Review!

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Lothar Matthäus, German Soccer Superstar Signs deal with Stockpair

Matthaus StockpairStockpair, the online binary options broker has brought on the former footballer and coach Lothar Matthäus from Germany. They will be able to show his image and likeness for some online and offline marketing campaigns. This partnership has been signed for a period of twelve months.

Lothar Matthäus is a very famous name to soccer fans born in the late 1970s or 1980s. So it seems that the demographic for these marketing campaigns is shifting towards an older generation that has some savings than younger people, and could be more interested in trading.

The Europe market is their main focus for this effort – Lothar Matthäus used to be the captain of the national soccer squad for many years back then. However, Lothar Matthäus is also recognized worldwide for his extensive career and many trophies earned through the years.

He has won a number of trophies, such as European Footballer of the Year, FIFA Footballer of the Year, most capped German player of all time, German Footballer Player of the Year and World Athlete of the Year.

On comments about the deal, the CMO of Stockpair, Yoni Messika, has stated: “We have not rushed to initiate partnerships, and have only moved forward in this new direction due to having found a partner that truly stands up to, and shares our values, beliefs, and drive for excellence.”

Check out our Stockpair Review!

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A Brief History of Binary Options Trading

binary options trading_picBinary options trading steadily becoming more popular among traders worldwide The market is constantly expanding to make space for new brokers and almost every day we hear something new happening on the market.

But where did it all began? If you are relatively new to the industry, you might not know the basics of its history. So we decided to take a look at the most important events that made binary options trading what it is today.

Chicago Board Options Exchange

The history of binary options trading officially began back in 1974 when the Chicago Board Options Exchange (CBOE) was launched. The creation of this body through the Board of Trade made binary options OTC transactions. At this point, trading was not standardized and was still to go many changes in the future. However, this was the first step in binary options trading becoming regulated and gaining respect.

SEC Binary Options Approval

Before 2008, binary options accounted for only a small part of trades. This quickly changed when the SEC (Securities and Exchange Commission) accepted the proposal created by the Options Clearing Corporations. This allowed binary options to finally gain importance on the exchange market. The American Stock Exchange provided binary options trading first, and others soon followed.

First Binary Options Platforms

Rapidly following the development on the market, 2008 was also memorable because of the first binary options trading platforms launching on the market. 24Option and AnyOption that are still on our recommended brokers list were among those first revolutionaries.

CySEC regulations

In 2012 The Cyprus Securities and Exchange Commission (CYSEC) has licenced the first broker (Banc De Binary) and since then stays one of the most important binary options regulatory bodies.

Popularity of Binary Options Worldwide

Since then, the popularity of binary options trading has skyrocketed. Already in 2015 there were 2,5 million binary options traders worldwide. Last year it was recorded that searches for “binary options” have doubled in the last three years. This phrase gets 110,000 searches on Google every month. And the popularity just keeps growing!

Technological Development

Another important development that we are currently facing is the increasing importance of mobile trading. As the world is speeding up, traders want to have an opportunity to have an excellent trading experience on the go. Luckily, many brokers have been understanding of this need and launched user-friendly apps.

So where will it all take us? Time will tell, but it is for sure that binary options trading is an important part of exchange market nowadays and its popularity increases rapidly.

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Can European Brokers Association change binary options industry?

European Brokers AssociationTo reflect the growth of the binary options industry, some of the largest organizations in the market have come together and decided to cooperate. In September 2016, they formed EUBOA – The European Brokers Association. Among its members are the top regulated brokers that are highly ranked by traders all around the world.

EUBOA is an organization that aims to become one of the biggest influencers in the binary options and Forex trading market. But what challenges does it have and how can it influence the current state of affairs? Let’s find out.

European Brokers Association

Comparing to other forms of investment, the binary options industry is still in its development stage. This has led to many changes and challenges for the well-established brokers and the market in general. With the aim of regulating the way the binary options trading is growing, the major participants have created The European Brokers Association.

Brokers that are members of the Association:

As you can see, the members are really some of the major players. In addition, only regulated brokers can request the membership status. This is done to assure the quality of discussion within the Association and secure reputable voice behind any of its decisions and actions.

What are the challenges for the Binary Options Industry?

Despite growing fast and gaining a lot of recognition from traders, the binary options industry also faces some challenges that EUBOA is aiming to solve. Some of these challenges include:

  • Misleading marketing. Many unregulated brokers and other players in the market position binary options trading as “easy-to-get-rich” activity. As more experienced traders know, binary options can be profitable and extremely positive, but it also requires some knowledge and effort.
  • Regulations leading to negative results. Lately, some European countries imposed regulations on advertising or even banned binary options trading. While it is possible it was done with good intentions, more often than not it makes the situation worse. For instance, the ban on binary options in Israel and Belgium only led to more unregulated brokers coming to the market. So instead of “protecting” traders by making it impossible to trade with a licensed broker, it is important to urge countries to put their efforts into regulating the industry.

Those are just some of the challenges that major figures in the industry are trying to overcome. And EUBOA is aiming to help them do this with its activities.

European Brokers Association Agenda

During its second meeting since the formation, the Association has issued the manifesto of the organization. Its main goal is to decrease the number of malpractices that put traders in danger and encourage positive rather than restrictive regulation of the binary options industry.

One of the main goals of the Association at this point is to establish strong partnership relations with European regulatory bodies and open a constructive dialogue that will benefit both parties. EUBOA believes it will improve the situation on the market and assure positive long-term development for the binary options industry.

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