Binary options used to be trendy and innovative when they entered the market. They made options trading accessible to everyone, with a known ROI, no need to understand sophisticated charts, no hidden fees nor lengthy sign-up processes. The trader was up and running, and ready to trade in just a few minutes.
That hasn’t changed. What has changed is that now the binary options market is saturated with copycats. Unfortunately, there may also be a number of companies out there which are a bit underfunded to be in this space. But there is also good news and signs of innovation coming from current and emerging brokers that are leading the industry.
Binary Options and the US Market
Are binary options legal in the US? The short answer given by exchanges which are licensed in US: it depends. Binary options themselves aren’t illegal, nor legal for that matter, in the US. The legality depends on who provides them. If it is a US-licensed entity, then it can legally offer binary options to the US public. If the entity lacks a license, then no binary options, nor other financial products, can be offered to the US market.
A few binary options brokers were presenting themselves as US-based, but the SEC put an end to that. The big news is that, since May this year, the partnership between the binary options platform SpotOption and the US-licensed Cantor Exchange allows companies to offer binary options to the US market. 100% kosher.
Binary Options Going Social
From operators to affiliates, social trading is growing in popularity. This creates opportunities for the copiers and the copied alike. Is this a sustainable trend? It will all depend on the success rate of such trades. Many successful traders “get it right” only a little above 50%. But they still profit from their trades because they know how to manage the amounts invested and the associated risks. They may take wider risks on smaller amounts, if the math says that there is an opportunity, and invest more where the margins are slimmer, but the forecasts are more reliable.
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The general public still needs to understand the position of a successful trader is not necessarily a sign of where the market is going. Copiers need to understand some trades are to test new approaches, to edge existing trades, etc. One needs to see the whole picture, not only an individual, isolated trade.
Binary Options Promotions
There are several promotions that are now making it easier for beginners to familiarize themselves with binary options. In addition to the usual bonus, brokers are offering premium-tools and the opportunity to place some risk-free trades. These trades allow customers to experience how binary options trading works, without risking money, but with the potential to profit from the trades.
These promotions can be very valuable, or become a giant headache for brokers and traders alike. The difference between the two usually depends on how clear the terms and conditions (T&Cs) are. Some promotions are 100% risk free, with no strings attached. Some refund the traded amount in the form of bonus for future trades. Both approaches have their advantages and disadvantages, what is important is how clearly the T&Cs are communicated to, and understood by, the trader.
Major Sponsorship and National Licensing
To differentiate themselves from the dozens of new binary options brokers mushrooming every week, some of the first movers in the industry decided to go the extra mile to prove their financial stability. This is creating a more trustworthy presence, bringing binary options to a wider audience, creating a welcomed and necessary climate to keep the industry growing.
AnyOption decided to get licensed in Italy, with CONSOB. About one year before that, CONSOB asked the Italian authorities to stop several binary options sites, like AAMS did many years before with online gambling sites. Prior to that, one of the leading brokers, 24Options, decided to associate itself with Juventus, investing in a prestigious partnership where sports and trading are presented as a way to success.