It comes as no surprise that there are mixed feelings concerning binary options: on the one hand, they make an indispensable weapon in the modern financial trader’s arsenal, but they can also cause quite a headache unless handled with care. Trading with unscrupulous brokers in unregulated markets has proved a downfall for many traders, and continues to plague modern financial markets. It is imperative to avoid such situations at all costs. This is where exchange traded binary options come into play that slightly resemble to Bitcoins traded on various platforms.
Exchange Traded Binary Options
There is a wide variety of binary options, all of which involve a fixed payout as long as they are in the money when they expire. If so, you get the 100 dollar payout (per option); otherwise, you get nothing. This only applies to legitimate binary options offered by legitimate financial entities . Unfortunately, many traders fell victims to a promise of easy money made by dummy corporations and phony dealers on unregulated markets, losing both the profit they were promised, and the fees they had to pay. Since markets were unregulated to begin with, there was no recourse for them other than to cut the losses and move on.
However, in recent years, steps were taken to improve safety and reliability in the financial markets – including the parts dealing with binary options. There are instructions and tips on how to recognize a legitimate binary options offers, but this is a topic for another article – this one deals with legitimate exchanges in which those are offered.
It is important to identify a regulated exchange dealing with binary options. Luckily, this no longer involves much legwork, as most legitimate exchanges have been recognized and have built up a reputation in their own right. Most governments and major financial entities have issued bulletins, notifications and even legislation concerning legitimate exchanges and listed a few tried and true examples. Locating such examples in your own country should not be difficult.
Advantages of Exchange Traded Binary Options
Regulated exchange traded binary options have several qualities that set them apart from their unregulated counterparts. Regulated exchange traded binary options have mechanisms dedicated to enforcing rules and high standards as defined by regulatory bodies. These rules apply to all aspects of exchanges, especially on how your money is being handled. A regulated exchange will typically keep your money separately, usually under the watchful eye of a reputable financial institution or broker; also, withdrawing your own funds absolutely has to go without a single glitch – this being the whole point of regulated exchanges (if you couldn’t access your own money, they would fall into the unregulated category, wouldn’t they?). Unregulated exchanges are usually biased; they match your offers, so you are essentially betting against them, and they control the transactions. They offer you vague deals under ambiguous conditions, and even if you win, they get to decide whether to pay you or invent an excuse and keep the money for themselves. This does not happen on regulated exchanges.