Traders have started to discover binary options trading, but especially here in the USA traders have a lot of questions about binary options trading, so I decided to put together a question and answer post.
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Are Binary Options Legal in the US? / Are Binary Options Legitimate?
Yes, binary options trading is legal in the USA. For instance, a binary options exchange like Nadex is based in the US, and is subject to regulatory oversight by the CFTC. If trading binary options was not legal for US residents, they would not have been approved.
Are Binary Options Real?
Yes, binary options are very real and they provide an alternative to more traditional trading by requiring a lower trade balance to start and less overall exposure to the market fluctuations.
Are Binary Options Worth It?
As with most things in life, if you are willing to put some effort into it, you will find that it is definitely worth your while to seriously consider binary options trading. This is especially true if you have been hurt by recent volatile markets where the market jumped or dropped hundreds of pips/points in a matter of minutes.
Are Binary Options a Good Investment?
Binary Options is not a traditional way of trading, so you would almost never enter a binary options trade and hold on to it for a long time. It is far more of a short-term strategy than a long-term investment, since you would not ‘buy and hold’ an asset as a long-term investment like you might do with traditional trading.
Are Binary Options Profitable?
Yes, it is definitely profitable. You cannot approach it like regular trading where you could be wrong 9 out of 10 trades and make up for your previous losses in the last trade due to a big move in your favor. With Binary Options, you grow your account by being right about the direction of trades, irrespective of the size of the market move. If you do the math, you will see that you need to have a win rate of at least 59%, and a payout return of 70% to break even. That should be easily attainable, and if you can get a win rate of 65% and a return of 80% (which is common), you really start to become very profitable. I personally know traders that have a consistent win rate of close to 80%, so binary options trading can be very profitable.
Are Binary Options Regulated?
In the USA, currently the only regulated binary options exchange is Nadex. Elsewhere in the world they are mostly regulated by EU and UK financial regulators and CySEC.
Are Binary Options Scams?
No, binary options are real and not a scam. Just like cars are real but some car dealerships are less trustworthy than others, binary options are real, but some brokers are more trustworthy than others. We aim to help you identify the brokers that cannot be trusted.
Can Binary Options Make You Rich?
Rich is a subjective term, so let’s put it this way. Binary options can make you a lot of money and binary options can be very profitable. If you have a win ratio of 75%, an average return of 80% and you trade $250 at a time only four times a day, you will have $7,000 by the end of a month. You should also consider this example when binary scam systems claim that you can make $50,000 in a week.
Can You Trade Binary Options 24/7?
No, binary options trading requires the stock markets and financial markets to be open, and they are closed over the weekend. During the week, you will be able to trade at all hours, although some hours are more active than others.
Can You Trade Binary Options for a Living?
Yes, if you are dedicated and this is what you do during the day, you can certainly trade binary options for a living, just like you can be a regular day trader for a living. You will probably also sleep better since you don’t have to worry about open positions over night and wake up to some or other market crash!
Can You Trade Binary Options in the US?
Yes you can. There are literally thousands of binary options traders in the USA. I haven’t been able to find any definitive figures, but anecdotally the US makes up about 40% of the binary options market.
Can You Trade Binary Options on Weekends?
If you’re in the USA, you can start trading binary options on Sunday evening/night. This is actually a good way to see if sellers of auto trading systems lie, just see if they report any trading activity on a Saturday 🙂
Can You Trade Binary Options on E*TRADE?
As far as I can tell, no, you cannot trade binary options on ETrade.
What is ITM, OTM, SR and EXP?
In Binary Options lingo that it refers to being “In the Money” (ITM) or “Out of The Money” (OTM), since it is a binary or true/false outcome. SR refers to the Strike Rate, or the market rate at which you entered the trade, while EXP refers to the Expiry time when the trade ends.
There are probably a lot more questions, but I’ll stop at these for now. If anyone has additional questions, please .
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