Dispelling The Myths On Binary Options

At first glance you may have the urge to run as binary options in general aren’t known to have a stellar reputation. Unfortunately there’s been quite a bit of misconception and misinformation concerning binaries.

I must admit the first time I heard about binary options and did some research on it. I didn’t hear too many positives concerning these instruments. I heard stories about offshore accounts in foreign countries where it was easy to establish an account (they would even take a credit card to do so) but not very easy to get your money out or make a withdrawal. Next I heard stories of identity theft as “those firms in Cyprus aren’t regulated and don’t abide by our rules.”

THEY ARE REGULATED

Let me set the record straight.

Nadex (North American Derivatives Exchange) is owned by IG Group from London, but operates as a standalone entity under US regulation and is in fact a US based exchange. Nadex is regulated by the CFTC and as anyone whose traded options or futures know the CFTC is not known to be lenient with any broker-dealer who violates a rule. The CFTC demands that each member firm must, at the end of each trading day prove solvency. All funds with Nadex are in US dollars and anyone who opens an account must show where those funds came from.

TWO TRADING CHOICES

In terms of the instruments Nadex offers, they come in two flavors: binaries and bull spreads. A binary option is a short-term intraday, daily or weekly contract that has a time element associated with it. The time element could be as short as two-hour durations during the course of any trading day. For example 8 a.m. EST – 10 a.m. EST, 10 a.m. EST – 12 Noon, 1 p.m. EST – 3 p.m. EST, etc. Each binary option contract has a floor (0) and ceiling (100) threshold and is priced in increments of 100 points.

Each binary contract will show the profit and loss potential prior to initiating the trade.  Each point is worth one US dollar. So as an example if I opened a trade for a contract and got in at a strike price that is worth 40 points, then I’m spending $40 dollars per contract to open that trade. If that strike price is exceeded at the time of expiration, then I would earn $60 dollars per contract as my profit.

A bull spread also has multiple expiration times up to one day. This gives the trader flexibility to put on a trade either pre-market or early in the trading day, and have total control over the position. How does this help the trader? If the market goes below the point of entry you will NOT get stopped out and if the market rebounds, your contract(s) are still valid. Compare that with traditional futures whereby you get stopped out and then have to initiate a new trade.

I asked Dan Cook, director of business development for Nadex.com where he thinks the market potential for binary options and bull spreads will go in the time to come. Nadex believes that they have a market that’s in its infancy and they certainly have a long way to go, but clearly the potential is there. Nadex started as HedgeStreet in 2004 and has seen enormous growth during this period. They are also adamant about serving the retail customer. From my own perspective, I’ve contacted their customer service and I have never spoken with more helpful people. They recognize that this is a new endeavor to most people and will take whatever amount of time is needed to explain binary options and how they work.

Growth curve using Google search trends: binary options have begun to go parabolic while Futures (shown) Forex, and ETF’s have been showing lower amounts interest.

NickAug8Fig1.jpg

NickAug8Fig2.jpg

THE NUTS AND BOLTS

Another aspect that I should bring up is when someone opens an account with Nadex; there are no settlement fees for trades that are not profitable. Commissions are .90 cents per contract ($9.00 maximum per ticket) and there are no brokers involved. In other words you’re dealing directly with Nadex, no in-betweens. Nadex offers a 10 day trial of their platform and its well worth the trial just to bring someone up to speed. Additionally as a trader you can open an account with as little as $100.00.

Oftentimes in this industry, we talk about the next big thing or the next new initiative, if Nadex isn’t it, it sure comes close.

#####

14 Comments

Join In on this conversation, post a comment below.
Visitor - juliet mcfadden: I have been scammed and scammed and scammed again. I invested with four binary companies and lost all of my investments totaling 290,000GBP. Then I was contacted by someone offering help – a company who specializes in binary recovery. I was scammed by them again. By the end of it all, I had lost all of my savings and I was in serious debt. I was desperate for help and that made me vulnerable to recovery scams. My husband is not around anymore and I have an 8-year-old son with learning difficulties. The pressure of being a single, working mother with a child who needs so much additional attention and support became overwhelming for me. I also felt too traumatized to trust anyone else and I was very afraid, but I had no choice other than to trust Geminihacks(dot)(com) They have been incredibly helpful and supportive and also very understanding about all of my fear and concerns they helped recover all of my funds back within a week using unethical means I feel quite, tremendously joyous about the decision to use Geminihacks(dot)(com) I really hope that others do not have to go through what I did, and I wish that I had realized before things were so bad that I was being scammed. I hope my story might help others to not be fooled the way that I was.
Reply Flag
Visitor - juliet mcfadden: I have been scammed and scammed and scammed again. I invested with four binary companies and lost all of my investments totaling 290,000GBP. Then I was contacted by someone offering help – a company who specializes in binary recovery. I was scammed by them again. By the end of it all, I had lost all of my savings and I was in serious debt. I was desperate for help and that made me vulnerable to recovery scams. My husband is not around anymore and I have an 8-year-old son with learning difficulties. The pressure of being a single, working mother with a child who needs so much additional attention and support became overwhelming for me. I also felt too traumatized to trust anyone else and I was very afraid, but I had no choice other than to trust Geminihacks(dot)(com) They have been incredibly helpful and supportive and also very understanding about all of my fear and concerns they helped recover all of my funds back within a week using unethical means I feel quite, tremendously joyous about the decision to use Geminihacks(dot)(com) I really hope that others do not have to go through what I did, and I wish that I had realized before things were so bad that I was being scammed. I hope my story might help others to not be fooled the way that I was.
Reply Flag
Visitor - maggie: I lost money trading with 24options 63k to be exact. And wasn’t able to get my money back even through legal means, don’t waste your time with any other action. simply contact binaryoptionsguru (at) protonmail (dot) com and have your funds recovered in a few days time. I assure you he is the best way out, in this state
Reply Flag
Visitor - michael roland: People have lost so much in binary options, that is; Traders have failed to withdraw your funds and profits made from binary options, failed to use the right strategies when needed, failed to engage with the right broker, not giving their trade a break, also having too many trading accounts which is one of the cause of their lost of funds, deposits of too low or too high amount of funds and most especially, not being able to present the full history of their trade when trying to withdraw their funds and their profits. If you are out there and having problems such as these or you are a beginner, or for a good reason need to raise your standard of living or you have been scammed or you have problems withdrawing your funds and profits made from your recent trades contact me via michaelroland727@gmail.com for more info and special guidelines
Reply Flag
Visitor - Raymond: I would advise all to contact fullworthplus@financier.com he helped me recover my invested money I had with 24option and Banc de Binary last week. 50k and 65k respectively for both companies I can’t help but post his services online. He is also helping my next door neighbor with the same issue we got into together. This binary option scam issue is really turning to wide spread disease, I advise the contact if you have fallen into the same binary option scheme by these brokers. So far he has recovered all the money from both my 24option and Banc de Binary accounts, contact him now to do the same
Reply Flag
Visitor - juanitajonathan: Trading is a good thing. I lost a lot before I got to were I am today. if you need assistance on how to trade and recover the money you have lost email me get new amazing strategy? If you are having problems withdrawing your fund from your Forex/binary trade broker even when you were given a bonus,just contact me, i have worked with a binary broker for 7 years, i have helped a lot of people and i wont stop until i have helped as many as possible, here is my email address if you have a bonus that was given to you and you wish to withdraw it juanitajonathan44@gmail.com
Reply Flag
Visitor - juanitajonathan: Trading is a good thing. I lost a lot before I got to were I am today. if you need assistance on how to trade and recover the money you have lost email me get new amazing strategy? If you are having problems withdrawing your fund from your Forex/binary trade broker even when you were given a bonus,just contact me, i have worked with a binary broker for 7 years, i have helped a lot of people and i wont stop until i have helped as many as possible, here is my email address if you have a bonus that was given to you and you wish to withdraw it juanitajonathan44@gmail.com
Reply Flag
Visitor - juanitajonathan: Trading is a good thing. I lost a lot before I got to were I am today. if you need assistance on how to trade and recover the money you have lost email me get new amazing strategy? If you are having problems withdrawing your fund from your Forex/binary trade broker even when you were given a bonus,just contact me, i have worked with a binary broker for 7 years, i have helped a lot of people and i wont stop until i have helped as many as possible, here is my email address if you have a bonus that was given to you and you wish to withdraw it juanitajonathan44@gmail.com
Reply Flag
Visitor - juanitajonathan: Trading is a good thing. I lost a lot before I got to were I am today. if you need assistance on how to trade and recover the money you have lost email me get new amazing strategy? If you are having problems withdrawing your fund from your Forex/binary trade broker even when you were given a bonus,just contact me, i have worked with a binary broker for 7 years, i have helped a lot of people and i wont stop until i have helped as many as possible, here is my email address if you have a bonus that was given to you and you wish to withdraw it juanitajonathan44@gmail.com
Reply Flag
Visitor - juanitajonathan: Trading is a good thing. I lost a lot before I got to were I am today. if you need assistance on how to trade and recover the money you have lost email me get new amazing strategy? If you are having problems withdrawing your fund from your Forex/binary trade broker even when you were given a bonus,just contact me, i have worked with a binary broker for 7 years, i have helped a lot of people and i wont stop until i have helped as many as possible, here is my email address if you have a bonus that was given to you and you wish to withdraw it juanitajonathan44@gmail.com
Reply Flag
Visitor - juanitajonathan: Trading is a good thing. I lost a lot before I got to were I am today. if you need assistance on how to trade and recover the money you have lost email me get new amazing strategy? If you are having problems withdrawing your fund from your Forex/binary trade broker even when you were given a bonus,just contact me, i have worked with a binary broker for 7 years, i have helped a lot of people and i wont stop until i have helped as many as possible, here is my email address if you have a bonus that was given to you and you wish to withdraw it juanitajonathan44@gmail.com
Reply Flag
Visitor - juanitajonathan: Trading is a good thing. I lost a lot before I got to were I am today. if you need assistance on how to trade and recover the money you have lost email me get new amazing strategy? If you are having problems withdrawing your fund from your Forex/binary trade broker even when you were given a bonus,just contact me, i have worked with a binary broker for 7 years, i have helped a lot of people and i wont stop until i have helped as many as possible, here is my email address if you have a bonus that was given to you and you wish to withdraw it juanitajonathan44@gmail.com
Reply Flag
Visitor - Andrea Blunt: There are many binary options companies which are not regulated all around. Most of these offshore companies are not supervised, connected or affiliated with any of the regulatory agencies such as the Commodity Futures Trading Commission (CFTC), National Futures Association (NFA), Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA). Please If you have lost a reasonable amount of money to an untrusted broker, email me on andreablunt55@gmail.com for full assistance on how to get your money back.
Reply Flag
Visitor - Nick Mastrandrea: Hi Andrea, you are correct. There were many unscrupulous firms out there, most of them were off shore and specifically based in Cyprus. In 2013 that came to a head as Cyprus needed a bailout from the EU and everything was exposed.
Flag