What are Binary Options?
By letting you execute trades on assets including stocks, commodities, indices and currency pairs, binary options’ trading gives an opportunity to yield good payouts within a short time span. When executing a trade, you are predicting in what direction the value of an asset will move by a predetermined time. Moreover, you know upfront exactly what the payout will be if your prediction is correct as well as how much of your investment is at stake should you predict incorrectly.
What are Binary Options?
In binary options trading, you predict whether an asset’s price will go up or down within a specified time period. The trader never actually buys or sells any asset; he chooses an asset (e.g. Microsoft stock, Crude Oil, GBP/EUR currency pair, FTSE 100 index), selects a trade amount, and predicts its price movement at the expiration time. If he predicts that the asset price would increase at the expiration time, he places a Call option. Conversely, he executes a Put option if he predicts the asset value will fall. Only three outcomes are possible after the option expiry. Trader gets a fixed payout if the prediction is correct, the option ends ‘in the money.’ If the prediction is incorrect, the option ends ‘out of the money,’ the trader loses a part of his investment. Finally, if the asset value is the same at the expiration time – which is very rare – the option expires ‘at the money.’
History of Binary Options
Binary options have, in fact, existed from 1973, but they were only available to institutional traders or individuals with high net worth. In those early days, the regulatory framework for options trading was not well developed. In 2007, the Options Clearing Commission recommended modifications in binary options trading which would make them available for the retail traders. Binary options trading for regular retail traders basically began in 2008, when the U.S. Securities and Exchange Commission approved binary options as a tradable investment instrument. Shortly after, the American Stock Exchange and the Chicago Board Options Exchange (CBOE) started offering binary options.
Why are binary options so popular in the UK?
Binary options’ trading has gained immense popularity in the UK in recent years. This can be attributed to several major factors. Some of the innovative trading bots, such as Ultimate4Trading, have been completely conceptualised and developed with the British trader in mind. Using an innovative algorithm which essentially does all the analysis for any UK trader by scrutinising complex data within nanoseconds, Ultimate4Trading then presents suggested binary options trades which it determines have over 70% chance of expiring successfully. Such a level of accuracy and performance has boosted the fame of binary options trading among the UK traders.
UK trading bots enable UK-based users to place trades round the clock. The bots like Ultimate4Trading offer reliable trade alerts on a range of globally-traded assets. Given the fact that the U.K, U.S., and the Asian markets have different trading hours, the UK trading bots constantly offer signals in a 24-hour period for the assets listed at all these markets. Consequently, a user always has live options to trade on. Furthermore, security and transparency are vital factors that have played an important role in popularising binary options in the UK. Binary options regulations in the UK require the brokerage firms to obtain a licence from an independent financial body such as CySEC, the most recognised financial supervisory body in the EU. As long as a trader ensures that he is trading on a fully regulated platform, he can rest assured that there will be a transparent trading process and his funds are secure.
Binary options trading can help individuals, even those with no prior experience, to significantly improve their financial status. If you’re a UK-based trader, register with an innovative bot like Ultimate4Trading today.