Binary Options are a relatively new trading instrument, available to the wide public since 2008. The impact on the retail trading world was huge and the momentum is still going strong, with more and more traders joining the arena. Until recently we were used to trade through Binary Options service providers, also known as brokers or brokerages who offered binaries exclusively, but now there’s a new trend developing: some Forex brokers are starting to offer Binary Options trading in more than one way. This is only the beginning and probably many changes will come along the road but at the moment we see things moving in a new direction: Binary Options and Forex are coming closer together and this ultimately brings more control to the trader.
Forex Brokers Go Binary
Australian-based GO Markets became the latest retail Forex broker to begin launching binary options trading to its clients. Soft launched to limited clients last month, the product was fully rolled out to their customer base today. The launch of binary options is the first notable product-based news from GO Markets since the brand went under the control of new ownership last year.
Providing technology for the offering is broker solutions firm, TradeToolsFX. The offering uses TradeToolsFX’s cross platform binary options offering which provides trading on both a standalone web or mobile-based platform and via MetaTrader 4. Commenting to Forex Magnates, Tim Brankin, Managing Director at TradeToolsFX said “We are very excited to partner with GO Markets, a true pioneer in the retail Forex world and one of the most respected firms in the industry. The decision to select the TradeToolsFX binary options solution is validation for our product and brand in the competitive world of binary options software providers.”
VantageFX, which was previously a sister broker brand of GO Markets, was the first major retail Forex broker in Australia to launch binary options trading at the end of 2012. In terms of the product, brokers are split on the correct method to offer binary options, with many firms launching it under a separate brand such as TopOption from Markets.com and PowerOption from AvaTrade. However, some brokers are seeing success marketing both binary options and Forex trading, such as the above mentioned VantageFX.
Brokers there have been some of the most active over the past two years, introducing new products and trading platforms. In addition to binary options and offering Chinese renminbi trading (which GO Markets also announced today as being offered on the platform) we have been seeing a trend of brokers in the country providing MetaTrader 4 to customers with enhanced features, such as those from FX Blue (formerly MT4i).
Why some traders prefer Binary option to Forex
Here is why you need to choose binary options over Forex:
1. Because you can make money even every 60 seconds if you choose to do so.
2. Much more simple tools to use and start trading only by placing UP or DOWN button.
3. You just register with the broker online and start trading, so no downloads required.
4. There are predetermined risks so you can limit your losses.
5. You can make profits from the start BUT always trade only with certainty in mind.
Why Forex Brokers Go binary
Forex Brokers go binary because the traders have found it easier to some extends. The extra advantages of Forex brokers are given below:
- With binary options, you have much wider selection of different trading assets:
In currency trading you trade only currencies. Binary Options allows you to trade, forex, commodities, indices, stocks and basically any investment with a variable value. This is limited only to what the broker is willing to take to the selection. Unless you only want to trade currencies, this is huge factor and main reason to choose binary options.
- In binary options trading, competition is not that fierce, at least not yet:
As already mentioned, the foreign exchange market is world’s largest market by turnover, where participants are the world’s smartest and most successful investors. In foreign exchange market, you are competing directly against these investors. In binary options investing, competition is still at a very low level. The main reason is that with the really large sums, direct investment in equities is cheaper. This gives a great opportunity to investors who are investing with smaller amounts, the toughest competitors are totally absent and all the talented mid-level competitors are so far absent also. You should use this great opportunity now while you still have time.
- Binary options investor gets access to much greater bonuses:
In foreign exchange market, competition is relatively stable due to its long history. Sometimes new viable comes into the market and shakes it a little bit by offering cheaper prices, but usually consumer will have to settle with what is currently offered. In binary options trading, markets are still constantly developing. New brokers appears every day, and they are trying to attract customers to themselves with large and juicy bonuses and benefits. For you as an investor this is a great thing, all freedom of choice is left to you.
- As a binary options investor, there is a number of great software available for free:
Intense competition does not extend purely into brokers, also different software developers are having tough competition because of scarcity of customers. As a result, the best applications such as The Real Robot, Binary Hedge Fund, Binary Stealth, Copyop, PayDay FM and OptionBot 2.0 are all available completely free of charge for now. This may not continue for very long so I recommend you to register all of these through our links while you still can. In this way, you ensure that you will have them for free in the future also if they become chargeable. On the other hand, best forex software costs at least thousands of dollars, and if you want that you have any hope of progression as an investor, you are practically forced to use these. This will drive investors with little money into hopeless situation.
- With binary options you know exactly what your payout will be if you hit right:
In forex trading, you can never know exactly how much you will earn in the best case or lose at worst case. This makes the choosing of right investment amount extremely difficult. Sometimes you will have the risk a bigger sum what was originally intended. With binary options, you know beforehand exactly what is your potential winning and what is the potential loss amount if the investment goes wrong.
- With binary options, you choose beforehand when you wanna close the position:
Some investors may view this as a disadvantage, but I think this is clearly an advantage. When binary options investment has been set, you do not have to worry about or keep track of it in any way if you do not want. You can spend time with your family or even go to the beach. In forex trading, you need to follow the changes in value of the investment continuously and to consider whether now is the best time to close the position or would it be perhaps sometime in the future. At worst, you will not be able to do anything other than follow the investment.
- There is no transaction costs in binary options:
Binary options investor do not pay any transaction costs. Expenses are in fact already directly tied to payout percentage. In forex trading transaction costs can be quite high and the minimum costs can make investing with small amounts unprofitable.
Is it better to trade Binary Options with a existing Forex Broker?
Forex brokers are starting to offer Binary Options in more than one way so it might be a good idea to elaborate on that. One type of approach is to establish a partnership with a Binary Options platform provider and to offer binaries the old fashioned way: in a separate platform, used entirely and exclusively for Binary Options. At the moment Alpari is the most well known Forex broker who chose to enter the Binary Options market using this approach. But it seems one platform is not enough for the Forex giant so they decided to go for 2 platforms which will be offered to clients depending on region: MarketPulse will be offered to clients from Russia and the Commonwealth of Independent States (CIS), and for UK traders, a SpotOption platform will be made available. Other Forex brokers gone Binary – Markets.com, with TopOption and HotForex, for those who know this Forex brokers.
Should we go for brokers with only binary option ?
If you are familiar with the two platforms, you will find all the normal features and Binary Options trading will be just as you know it. No spectacular changes are made but we have a new face in town in the form of a reliable and well known Forex broker who is now stepping into the binary arena. As an extra feature I can mention the fact that Alpari’s Binary platform allows you to trade with an expiry time of 30 seconds. That’s the fastest expiration available to date and it will probably appeal to thrill seekers or to guys who get bored waiting for 60 seconds to pass… yea, 60 seconds trading is so not cool anymore. Just joking but anyway, it’s good to know we now have an even faster expiry time.
Is is useful to Trading Binary Options Directly on MT4
The second innovation hitting the Binary Options industry is the possibility to trade directly from Meta Trader 4, the well known Forex platform. For a long time binary options traders used this platform for conducting technical analysis and then placing the actual trade on their binary broker platform. But as you can imagine, this way of trading will get you a lot of headaches especially when trading very short expiry times because the price displayed on the Meta Trader 4 platform is different than the one offered by the binary options broker. This is actually normal because different brokers have different price feeds and more than that, Binary Options use their own calculation method. I am sure more brokers will follow this path eventually but as I mentioned before, it’s only the beginning of this new trend and just timid steps are made.
One of the first Forex brokers to offer Binary Options directly from Meta Trader 4 is Direct FX, a regulated and reputable Australian broker. I often complained about the fact that Binary Options traders are denied access to the necessary tools needed to conduct proper technical analysis; well, now all that is over and the full arsenal of Meta Trader 4 can be used, without having to open a demo account with another broker and without switching between platforms to place the actual trade. The major downside of this platform is that traders can only trade Forex assets, no Indices, Commodities or Stocks are available to trade. Another well known Provider, Leverate, will now offer binary options solution to its clients. In the future we will fully review this new way of trading Binary Options and we will give you all the details regarding its functionality, benefits and drawbacks so you can decide if this new way of trading fits your style or you would rather stick to the old and well known Binary platforms.
Are newer brokers always Better? Or Existing brokers are always on top?
There you have it: two big innovations in the field of Binary Options which can change the way traders think about binaries. The fact that reputable Forex brokers like Alpari reach out to Binary traders is not an innovation in the true sense of the word, but it definitely shows that binary options are starting to gain more popularity and the hype behind them was not just a soap bubble waiting to burst. Also, the fact that binaries made their way into Meta Trader 4 is a breath of fresh air for traders who need technical tools, chart analysis and candlestick patterns, things that were not available before due to the limitations of the classic binary platforms.
However, some traders will still choose the simplicity of the normal platforms and will continue to use those because the attractiveness of Binary Options comes from their accessibility and ease of use. Furthermore, there may be some concerns regarding the ability of Forex brokers to provide the best Binary Options service. Even if those brokers are good at what they currently do (Forex) will they be able to really understand the needs of a Binary Options trader? That is a question that still remains unanswered but we will keep digging to bring you an answer.