Welcome to the Binary Option Examiner, A Place Where Smart Binary Option Traders Hangout!
Binary Option Platforms
The platform for trading binary options is the life blood of the binary options industry. First invented by SpotOption, who is by far the largest binary options platform provider worldwide. Now there are close to 300 binary option brokers worldwide, the brokers still have only three platforms to choose from. As 2014 begins, the industry is looking for new stronger, and more versatile trading platforms to expand the assets classes that are available for trading binary options. Read our comparison of binary option platforms here.
Binary Option Signals
The hype surrounding signals is what brings people to the industry, but the reality of signals is what makes traders hate the industry. When a trader hears about a new signal software, the dreams of huge wealth lures them in. When the system produces bad signals, their account balance quickly drops to zero, losing all their money! View signal providers here.
Binary option trading is often compared to gambling. There are two reasons the comparison is made. People assume that the chances of being correct in the binary options market is a 50 / 50 chance. People assume that betting on binary options is the same as playing blackjack or roulette.
The difference between gambling and binary options is, with binary options the trader is playing the financial markets. Based on the efficient market theory, it is possible for a trader to beat the stock market.
The difficulty in beating the financial markets with binary options has to do with the time frame of the binary option. If a stock market investor were to buy the S&P 500 and hold onto it for 30 years, history shows that the investor stands to realize an average return of 8% a year. When a trader buys a binary option, that trader is trying to predict the one minute or one hour movement of the market / asset. Many professional investors will say that such a thing cannot be done. This is similar to the day traders of the late 1990’s who traded on volatility and made fortunes. Once the markets crashed and the volatility disappears, the number of successful traders decreased and many prop trading firms went out of business.
Another issue with binary option trading has to do with the openness of the exchange. This is a technical aspect of trading whereby the trader is playing against the broker, as oppose to the regular option markets that are monitored by the CFTC, where the trader is trading on an open and regulated exchange.