London,UK - May 18, 2015 - (Newswire.com)
When brokers first started offering binary options in 2008, it was a simple up down or high low option. As the industry has grown and become more widespread amongst Forex traders, the types of binary options have grown.
The decentralization of exchanges allows brokers using different trading platforms, to create new types of binary options. Range options, boundary options, ladder options and pro options are just some of the new option types now being offered by brokers.
The original trading platform created by SpotOption, although widespread in use by many brokers, now faces tough competition. TechFinacials, a London Stock Exchange publicly traded company, recently incorporated Forex trading into their platform. Their advanced trading platform includes the increasing popular boundary options. The boundary option type gives traders the ability to invest based on the underlying asset staying within a range, or ending outside the range.
Marketpulse, which is the binary options platform used by HighLow and BinaryTilt has increase the returns on their one touch options to 100%. This opens up the discussion about returns on binary options in general. Many brokers offering Ladder Options brag about 400% returns, however a discerning trader can easily see that those returns have a one percent likelihood of actually ending in the money. Read about more trading platforms.
Many uneducated investors believe that the returns on all binary options should be 100%. They tend to believe that every option has a 50/50 chance of ending in the money. The reality is that, when trading the financial markets, higher and lower are not equal. There are times when a currency pair is trending higher and a call option has a higher probability of ending in the money.
The way a binary options broker or market maker controls their risk is by adjusting the spreads along with the payouts on the options.
A disciplined trader looks beyond the returns offered on the options, and focuses more closely on the level the option needs to reach for that payout. When an investor is presented with an option that expires in 60 seconds with a 70% payout and an option that expires in 10 minutes with an 85% payout, it means that the risk on the 60 second option is lower that the risk on the 10 minute option.
When choosing a binary options broker, it is always important to check that the actual broker is licensed and regulated. Although the trading platform is licensed, it does not mean that the broker has received a license. Read more about the highest rated brokers.
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Original Source: The Differences Between Binary Options Brokers Have Grown Wider
