Binary options business gambling or trading

Is Binary Options Trading Gambling? Photo: Mark Hesseltine. There is a mystery cloud going around Binary Options, caused by the lack of knowledge of general public, there are a lot of speculations and wrong information coming from people that don’t have any real knowledge nor experience with Binary Options and it is in their nature to speak about things they are not very clear about. There is the ultimate speculation about Binary Options: Is Binary Options Trading gambling? As you probably know already, BinaryOptionsTrading-Review. com has an international team of highly experienced traders and we all agree on this – Binary Options Trading does not have to do anything with gambling! Is Binary Options Trading Gambling | Odds. As we do not want to stop on a pure statement here is why we are claiming that Binary Options Trading is not gambling. Imagine yourself throwing a dice. With Ceteris Paribus applied, you have exactly 16 chance that you will get a single number. You do not have any influence on what number it is going to be nor there is a way you can predict that you will get the number you wanted. Again, the chances will always be the same, with each throw of the dice. Binary Options Trading offers us something different than just throwing a dice or flipping a coin… What differentiate Binary Options Trading from gambling is KNOWLEDGE that you are investing in a single trade. Is Binary Options Trading Gambling | Real Example. Let us take for example trading Binary Options with Gas as an asset.

Unfortunately, there is a crisis going on between Russia and Ukraine, two big producers and consumers of Gas. Russia is providing Gas to more than “half of Europe” trough Ukraine. With conflict of this two giants Gas supply is immediately becoming insecure. Using basic knowledge and everyday information it is very easy to predict the direction of the price of Gas. Now, to go back to Binary Options, with having two options to choose, high or low, or starting 50% chance if you want, you are now putting your investment on prediction that price of Gas will go up or down. So, with the starting chance of 50% you add your knowledge about what is going on with, in this case, Gas and your chances become incredible higher, certainly much higher than 50%. Is Binary Options Trading Gambling | Conclusion. If you respect your knowledge and you know what is going on around you in the world, Binary Options Trading is risk controlled method for investing your money and there is no way we can speak about gambling. If you close your eyes and ears and just randomly choose high or low option, than yes, they are right, Binary Options Trading is gambling. In the world of common sense, to conclude again, we definitely can not put Binary Options Trading and gambling into the same box. Binary Options Trading vs. Casino Gambling. Binary option trading is a type of financial trading module where there is a high payout percentage for the trades that do well. Casino gambling on the other hand is a form of sport in which an individual gets to lay bets on the occurrence of an event. Typically, in gambling, the result of the event is unknown and depends on a good amount of luck. The major difference between gambling and binary option trading is that while binary option trading relies on sound business statistics and modules, gambling relies more on luck and probability.

The differences and the similarities. Binary options rely on online trading techniques and an initial investment with which you can trade. It is a much simpler form of trading compared to the real trading and yet it still makes some money for the participants, both brokers and traders. In addition, you can get very high returns in a very short time. Casino gambling on the other hand, refers to a game of sorts in which various individuals place bets on the probability of an event occurring. For instance, in a racing match, patrons may be given the option of earning some money by placing bets on the probable winner. In addition, the probability of different people winning is normally ranked and different returns assigned to each. Another major difference is the amount of risk that an individual undertakes in the two circumstances. In casino gambling, the risk is undefined and open to control by factors outside the control of the player. However, in binary option trading the trader and the broker are usually in control of a larger number of the risk factors, which can be analyzed based on sound business models. This allows the trader to control the varieties of outcomes that are possible during a trade. On the flip side, it is important to note that gambling does not only rely on luck, but also smart trading techniques, which may influence the outcome. Gambling, especially in casinos is normally designed to keep the patrons entertained and pull them in again and again.

Usually, casinos ensure that patrons keep winning in various amounts to keep them hooked. On the other hand, binary option trading operates in a more formal manner, in spite of the result of the market activity. This means that the basis on which trade is performed in these two scenarios is very different. In addition, binary option trading usually offers refunds to the traders in case of out of money outcome. In essence, this provides a sort of security to the traders and the brokers in the binary trading market. This is an option that is not usually exercised by casinos in gambling. The losers usually lose out on their investment while the winners tend to take home more than they invested. Both casino gambling and binary option trading rely on specific time deadlines however, gambling can go on for a more unscheduled period when compared to the binary option trading. As such, you can keep playing over and over until such a time that you are exhausted or the casino is shut down. IQ Option is one of the most reliable and secure brokers and a safe haven for all traders.

This broker is regulated by and offers options for as low as $1, plenty of stock options and a great trading platform! Binary options. Gambling or financial instrument? Binary options are nowadays widely recognized as one of the most accessible ways of getting introduced to financial markets. The pace of penetration in the retail segment has been truly overwhelming during the last 5-7 years, yet even though this type of instruments has undergone a noticeable shift of perception in both investors and market participants minds, we still see no finalized common opinion formed on the essence of that instrument. Let's try explaining and answering to ourselves what binaries actually are and that are their strong points. Industry emergence. Following Fx on the way to regulation. The high popularity came at an initial reputational cost for the new asset class. One of the reasons for binaries rapidly gaining popularity was the lack of regulatory framework and industry standards, which ensured a strategic advantage over forex, derivatives other more complex markets in the eyes of emerging start-up brokers. The effort-efficiency of launching a binary brokerage attracted a vast number of undercapitalized market participants diluting the image of the service, leading to the incorrect perception of binary options being more like gambling and a scam rather than trading. The sites Binary option brokers appeal to the same type of people who play poker online. But they somehow have an aura of being more respectable because they represent themselves as offering a form of investing.

Don't kid yourself. These are gambling sites, pure and simple. It's probably just a matter of time before regulators move in on them. Gordon Pape, "Don't Gamble on Binary Options" ( Forbes ), 27072010. The gambling parallel was, unfortunately, widely exploited in promotional campaigns run by market participants. Balancing on the edge of two confronting definitions (gambling vs. trading instrument) has raised numerous discussions within the trading and expert community, both sides having their supporters. Gradually this debate fostered a view, which I personally find most reasonable, that primarily questioned not the essence of binaries, but mostly the suitability of any asset class to a particular individual or method. Since one of the meanings of gamble is taking risky action in the hope of a desired result or staking something on a contingency, pretty much any financial instrument may be considered as an object of gambling if approached without proper prudence. Judging by this definition, a lot of what we do in daily life is gambling. Binary options are gambling much like other financial instruments, tangible or intangible.

"Are Binary Options a Form of Gambling?" ( FinanceMagnates ), 30072014. Indeed, opening an overleveraged Fx position with a micro-account, opening a leveraged CFD position without stop-loss on a stock the trader does not have a profound knowledge about, going into a derivative while not building a real hedge does not seem getting any further from gambling in the common perception of that concept. You may have grasped that the common trait of the last 3 examples is poor risk management. Let's be honest, any investment activity is gambling. Venture capitalists also gamble when they invest into start-ups, there is no guarantee that the company will survive let alone bloom. "Are Binary Options a Form of Gambling?" ( FinanceMagnates ), 30072014. Poor risk management usually originates either from the intended will to speculate with high risk or from the unsuitability of the instrument to the particular client, which in its turn comes from the lack of regulation in client assessment, informing and general education. And here again we return to the initial problem with binaries - the lack of regulation. Fortunately, we already are seeing a retraction of this tendency towards a closer regulatory oversight, renowned financial market participants embracing the binary offer in their product range and traders exploiting the original strong qualities of binary contacts in their trading strategies. Cyprus was the first watchdog to officially start regulation of binary option brokers in 2012, while many of other EU jurisdictions kept viewing binaries as "game of chance" and directed requestors towards their local gambling regulatory bodies.

Things started changing fast in 2015. The year started with a landmark decision by Rotterdam court ( Source ) on the OptieClub case, where the Netherlands financial regulatory body (AMF) was forced to issue the first licence to a binary options broker. The watchdog had rejected the request earlier despite falling into the financial markets product definition under MiFID regulations and directed the broker to the Dutch Gambling commission. Similar news are coming from the UK where Her Majesty's Treasury issued a consultation paper considering regulating binary options as financial products. The UK Government is consulting on proposals to treat binary options as a financial rather than a gambling product. This would mean binary options would be regulated by us, the , in line with practice across most of the EU, and no longer be regulated by the Gambling Commission. Both the Dutch court decision and UK initiative are indications on an impending paradigm shift that might open the gates for legitimisation of binary brokers seeking to get solid regulation in the EU market. Essentially, binary options industry is following the same path the Forex markets started 15 years ago: starting as a newly emerging speculative market dominated by non-regulated participants, low client confidence and ambiguous image retail, Fx turned into a well-established industry, overseen by financial authorities in virtually all developed countries it is now offered in the product range of numerous commercial banks. Binaries are now making the same journey towards regulation and transparency and seem to be doing it faster than Forex did in the past. At Dukascopy we have been feeling the shift of attitude to binary options especially strongly as our decision to enter the binary market 2 years ago was being taken amidst reported reservations regarding the suitability of this service to a well-established and reputable broker. On the contrary, we saw a clear competitive advantage in the fact that binary trading will be offered by a Swiss-regulated bank via proprietary platforms. We believed that this should contribute to the diversification of the market, reinforce traders' security and offer an alternative to standard solutions thus ultimately improving client confidence to the entire market segment. Binaries as simple, yet secure and useful financial instrument.

Simplicity, straightforwardness and transparency are considered to be the key inherent traits of binaries. Absence of commissions, binary result (i. e. there exists only 2 outcomes), which implies possibility of capitalizing with maximum payout on minimal market movements contract amounts as low as 1 USD and available short timeframes, sometimes less than a minute. Despite the doubts of being proclaimed speculative, binary options should be advocated as possessing all the characteristics of a financial instrument that can be used to realize investment goals. Binaries have particular attraction for investors whose strategies involve trading on economic news. News trading is a sophisticated investment activity that at minimum implies the following: Knowing when news are out and in what countries Being capable to carry out technical and fundamental analysis to assess the news impact Picking a currency pairpairs that are expected to be impacted Forecasting the needed duration of an option (e. g. 5 minutes or an hour) to avoid the interim noise volatility before and after the news is out Correctly and carefully placing a pending order and describing it. Noise volatility (volatility spikes) is a real problem for news traders that can be successfully dealt with using binaries. Here is a real-life example that demonstrates the impact of volatility: Example 1 : ECB Minimum Bid Rate (act. 0.50%, exp. 0.50%, prev. 0.75%) Date and Time: 02052013 11:45 GMT. ECB has reduced the base interest rate by 0.25%, which elicited a downward pressure on the EURUSD. However, a trader who correctly interpreted the news might come across a noise volatility that could have resulted in interim losses on a spot position. Binary option would be more preferable in this situation. Example 2: ECB Minimum Bid Rate (act.

0.50%, exp. 0.50%, prev. 0.75%) Date and Time: 02052013 11:45 GMT. Unemployment claims came out significantly lower than expected. However, the investor who correctly predicted it and forecast downward movement of USDJPY would face an unpleasant surprise when the pair hiked by 50+ pips. After the unexpected spike the pair abated as expected. An investor with short spot FX position could have been closed on margin cut or voluntarily closed the losing position. Binary option would again help the trader pass over the spike and gain on the correct forecast. Binaries also feature a set of important qualities related to tradingexecution risks management. First is the independence of market depth, which means technical absence of slippages. Second, predefined maximum profit and, most importantly, maximum loss make it impossible to lose more than the amount of the contract. The latter also implies impossibility of driving the account into negative equity even under market force majeure conditions like those observed during the CHF soar on January, 15th 2015 after the Swiss National Bank's surprise decision to abandon the EURCHF floor. With all of the above features binary options are making another major step in turning markets more accessible to a retail trader, comparable to forex instruments going into electronic trading on retail platforms 2 decades ago. Adding a unique touch to binaries in Dukascopy.

Being a banking group with an considerable IT development expertise Dukascopy undertook the development of an in-house binary service and trading platforms (Web, iOS and Android), which ensured considerable flexibility and freedom compared to the common approach of going into a white-label with one of the major platform vendors, an approach that had become standard at that time. Seeing binaries as a new area for us, we went for a conservative start with offering the classic yet most widespread UpDown binaries on currency pairs. Our flexibility allowed us offering features that were and remain unique in the market even for that basic binary options type: fixed payouts with a default level of 90% , which still remains among the highest in the market, custom-set option durations of 1-60 minutes with 1 min discretion. To achieve total transparency of the price feed we are using the SWFX (Swiss Forex Marketplace) flux, i. e. the same quote source as Dukascopy's FxCFD trading platforms. Another valuable feature highly appreciated by technical traders are the fully-functional charts with over 180 indicators and drawing objects available in the Web Binary platform. After the service was successfully launched for the clients of Dukascopy Group, binaries became available as a separate module in the Dukascopy White-Label partnership program. This year we extended the instruments range with Daily Stock Options giving access to a session trading of over 1500 stocks from all over the world and Pair binaries on stockindex combinations. Unlike the conventional approach of offering a short fixed set of pair combinations, our traders can build their own compositions. Many updates and new features are now in the pipeline. This includes further integration of our products, allowing automatic creation of new trading subaccounts and platform improvements. To harmonize the offerings available to FxCFD clients and binary traders we are now working on launching an equity bonus program for binary accounts. Finally, new binary instrument types, including the Touch binaries and their variations, are on the way. Again, as with UpDown options, we intend to continue re-thinking conventional instruments while striving to add a unique element to our service. All the above mentioned unique features of our binary options are fully available to the retail clients thanks to Dukascopy Europe.

Binary options accounts with Dukascopy Europe are available for contract sizes from 1 USD and an initial deposit of 100 USD. I invite you to get your own experience of binary trading with us at dukascopy. eu. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of NASDAQ, Inc. Is binary options a new form of gambling? Binary option has supposedly taken Forex and stock trading to a completely new level. With new and improved technologies, brokers are providing platforms that claim to make trading super fun, quick, and effective. If binary option is an actual trading instrument and is not gambling then it has successfully taken out all the boring elements from normal trading and have replaced it with a fast and interesting platform. Is binary option Gambling? There are two sides to this story. If you ask this question to a broker, then most of them say no i. e. they will claim that it is not gambling. On the other hand, there are several clear indications that suggest binary options is gambling. Just for the record, it is my personal opinion too i. e. binary trading is 100% gambling. Majority of brokers will tell you that options is not gambling, and they will defend their position by giving different reasons. An account manager once told me during a phone conversation that their website is connected to some network by which their site get real-time trading data from the markets, and when a customer wins a trade, a third party pays the profit.

“His company wants its customers to win as many trades as possible on each trade customers execute, our company receives a small commission by a third party,” he added . He further explained that when a trade ends in a draw then they don’t get any commission they receive commission only when a trader either wins or loses a trade. Binary option brokers lie! The account manager continued the story and said that they want traders to win and make money so that the company can continuously get commissions. “If a customer loses all his money and stops trading, we stop getting commissions,” he said. If what the account manager said is true then all of this could make sense. Traders win trades and make profit while the broker gets commissions it seems to be a workable system that actually does exists in ECN Forex Trading. Another thing they brag about is being a licensed entity. Most brokers reside in Cyprus and they get their trading license from Cyprus Securities and Exchange Commission . They ask traders to trust them blindly because they are regularized by . Binary brokers are trying really hard to give the impression that what they do is same as Forex Trading and I must say they are doing a great job, however there are several unanswered questions like, who exactly is this third party? Moreover, if majority of traders make money then how is it surviving? How does it make money for itself? Broker want to make, not lose money.

Companies do business to make money for themselves they don’t do it to make other people rich. If you search on Google, you will find tons of withdrawal related complaints against majority of brokers. Traders who are able to make profit are not getting their money from brokers they make up numerous excuses for not paying. Why do they have such a hard time paying profits to the traders? You will find countless complaints against famous brokers who spend thousands of dollars every day on advertisements. They will make up all kinds of lies to hide the truth. Nevertheless, there is hope. There are few honest companies in this otherwise awful business, one of which is MarketsWorld. This broker is famous for paying profits without any issues. Unlike other dishonest ones, they operate under the law. MarketsWorld or MW is the only financial betting site that operates in Isle of Man, UK. Gambling Supervision Commission GSC regulates this company. Gambling Commissions do not regulate currency-trading companies, so if binary option is not Gambling then why does GSC regulate MW? In online casinos, if you play and win, the casino owner pays you the money from his pocket. You win and the casino loses. Binary trading operates in the same way the real name of this business is “Financial Betting.

” Binary options trading is completely false label for this business. A live chat representative of MW gave the following statement: “However since all trades you buy are against the company, we view it as a conflict of interest to offer trading advice directly.” Here is a screenshot of the live chat discussion: It is up to you to decide whether this is gambling or not. Additionally, you should know that making profits in this business is only possible if you can come up with a good trading method otherwise, you will lose all your investment. Brokers advertise this as an opportunity that you can use to get rich quick these are all lies. Without a solid working method, you cannot make profits. Following is an example showing how financial betting, aka binary options trading, work: Step 2: Select An Expiry Time. Date: 2016-12-10 14:10:41. Said: If you analyze it carefully, you will know Binary Option is a scam. 1) how binary option brokers make money? 2) they make money from your every losing trade. But they put it beautifully that they only earn commission if you make money.

3) life is full of challenging, it is very difficult to tap on traders who knows how to trade, 4) thus they turn to big big very big market of those who does not know how to trade. 5) they offer “hold hands” method so that inexperienced traders are willing to pump in money. 6) to make it even more attractive, brokers even offer 100% bonus top up for every dollar you pump in. 7) Account Manager will call you and follow his signal to trade, 8) hey remember, who pays his salary? Broker, not you!! 8) he will make sure you lose every cents so that all your investments are “transferred” to broker’s account rightfully n cleanly. 9) broker makes money is good job for Account Manager, thus they can’t be bothered how you feel. They don’t call you any more! 10) in order to squeeze further from every drop of your blood, recovery Account manager will call you, sympathy your case and say that your previous Account Manager has been sacked! Because they made the company lose an important customer like yourself.. 11) Recovery manager will “promise” recovering your investments in 3 to 6 months.

They will entice you to pump in more money to trade conservatively. 12) after you pumped in your money, they will slice you stupidly for the second time…. 13) because you are more conservative this time, you will win & lose your trade, more lose trade of course! your investment will drain off slower until you realize that you are real stupid in this world !! 14) this tactics is the best scam on earth, you are being sliced twice and still do not know who they are!! 15) brokers and Account Managers now listen…I am not sure if you believe in retribution, karma and hell. Those money that you scammed successfully are peoples’ hard earn money. Believe or not, I know many has committed suicide because of your scam! They will haunt you down. You will not have good death!! You will never enjoy rest in peace. Date: 2016-10-26 14:32:44. Said: I invested in a Cyprus company called Opteck… and they lost all my money in two hours… Opteck said they matched dollar for dollar. I invested 126,357 US dollars and Opteck made an even 300,000 US dollars.

And all gone with out a guilty conscience. DO NOT INVEST WITH OPTECK CYPRUS. Date: 2017-03-02 14:55:56. Said: Useful Resources! Date: 2017-07-31 08:36:20. Said: In my comment I want to touch a few subjects. First of all, I am also a victim of binary options do not mistake for a second - it a well oiled machine operation from the middle east and has millions of victims and devastated lives behind them. I had worked with a company named 23 Trade, I trusted them and let the broker know that I’m a single mother that is in strangulation to raise her children and needs money, my bad. I was manipulated to invest 12K in 4 months time. All gone to the garbage and the explanation I got is that “this is trading. Sometimes you win sometimes you loose.” My luck is that my brother worked in IT, and know his way throw computers. Once I explained to him what had happened, we started to search online to get more information and about the industry, we consulted a few law firms and decided that we are not going to let them to get away with it. After consultations with a few companies we did choose one (MBL) and we started to work to get my money back.

I must say I was so broke that my brother actually gave me money for the process - it was devastating . In the end of this story, in a few mounts time I managed to get the funds back. Now I got to have a happy ending, but a lot of people are actually loosing they’re lives in the industry. Bottom line of what I wanted to say - ALL BINARY ARE FRAUD. period. No good companies. If you are, a victim like myself, do know that you can solve this situation. Go, read online, consult with lawyers. Just DONT let them get away. If i can - so can you too get your money back… 11 Comments on "Binary Options Trading is Gambling… or is it?" Throw your money down the toilet instead of wasting time in binary “TRADING”…. After losing lot of money, I finally was able to make some profits.

I lost $10,000 then invested 5,000 again. With some claim trading, I made 500 dollars and requested BANC-DE-BINARY to send me this profit. Before this request, different a** ho*** were contacting me and were always telling me that I need to invest more and more money. When I requested a withdrawal all calls stopped and they did not respond to my emails. It has been 2 months now and they have not sent me the profits. I also tried to get my $5,000 back but because no one is replying to my requests, I am trapped in a dead-end. Live chat will sometime simply disconnect after knowing what the issue is. Sometimes, they tell me wait. BANCDEBINARY IS SCAM. I live in Pakistan, I tried to deposit money with my broker, but my credit card company called and told me that they are going to reverse the transaction. They also warned me to never use my card for business purposes.

Can someone suggest a work-around? How can I deposit funds with if I live in Pakistan? Please help! Hi, this is a trading scam period. Sir I am a Muslim and I want to trade, but some people say it is gambling, so what should I do? This certainly is betting, stay away from it. Not only your religion denounces it, but also avoid it as it is gambling, 99% of the time, you will lose all your money at the end of the day. Binary Options. This exclusive report aims to serve as a manual, answering all of the questions on the Chinese multi-asset trading industry that you were always afraid to ask. The following terminology applies to these Terms and Conditions, Privacy Statement and Disclaimer Notice and any or all Agreements: "Client", “You” and “Your” refers to you, the person accessing this website and accepting the Company’s terms and conditions. "The Company", “Ourselves”, “We” and "Us", refers to our Company. “Party”, “Parties”, or “Us”, refers to both the Client and ourselves, or either the Client or ourselves. All terms refer to the offer, acceptance and consideration of payment necessary to undertake the process of our assistance to the Client in the most appropriate manner, whether by formal meetings of a fixed duration, or any other means, for the express purpose of meeting the Client’s needs in respect of provision of the Company’s stated servicesproducts, in accordance with and subject to, prevailing English Law. Any use of the above terminology or other words in the singular, plural, capitalisation andor heshe or they, are taken as interchangeable and therefore as referring to same. We are committed to protecting your privacy.

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You are therefore advised to re-read this statement on a regular basis. These terms and conditions form part of the Agreement between the Client and ourselves. Your accessing of this website andor undertaking of a booking or Agreement indicates your understanding, agreement to and acceptance, of the Disclaimer Notice and the full Terms and Conditions contained herein. Your statutory Consumer Rights are unaffected. © Finance Magnates 2015 All Rights Reserved. Binary Options – Trading or Gambling? If you're still unsure whether binary options is more like gambling you should read this article. This guest article was written by Simon Klein who is a professional trader with over 10 years of trading experience. Simon has a passion for trading and loves to train and coach others – whether a complete beginner or an experienced trader. He is also the founder of TradeSmart4x. com. Binary Options are a hot topic at the moment.

There is a lot of misinformation out there and conclusions are being drawn based on a lack of knowledge instead of being based on a deep understanding. This article will cover the interesting topic about how to classify whether the activity you are doing is considered trading or gambling and will uncover how to ascertain whether what you are trading is a financial instrument or not. It appears, based on a recent article, that regulators in different countries do not know whether to classify binary options as a financial instrument or gambling. This statement shows a shallow understanding of binary options as well as financial instruments. There are a number of types of binary options and this article appears to imply that there is only one. For example, there are fully regulated binary options that trade on the NYSE and NADEX. There is also a Binary Options Exchange where you can be the writer and seller of binary options. Gambling or financial instrument? According to the Merriam-Webster dictionary, gambling is defined as “to bet on an uncertain outcome”. Isn’t trading any financial instrument according to this definition gambling?

Well, it is if you are just looking at the outcome of one individual trade in isolation. If on the other hand, you are trading a system that has a positive expectancy then the outcome of a large enough number of trades is not uncertain anymore – you will make money! I would like to offer a different and novel approach to understanding the nature of trading and gambling. The approach is based on a two prong analysis that looks at both the nature of the “instrument” that you are trading and how you are trading. What are you are trading? If there is no system that can be developed that has a positive expectancy, then you are gambling and what you are “trading” is not a viable financial instrument. How are you trading? If you trade any financial instrument without a method that has a positive expectancy, then you are gambling. Let us take a look at a few examples to see whether you are gambling or trading. Playing the slot machines in a casino. This is clearly gambling as the odds are in the favor of the slot machines over time. If you play long enough you will always lose.

The casino always wins. Trading options with a system that has a positive expectancy. This is clearly trading and not gambling as you will make money over time even though the outcome of any one trade is unknown. Trading stocks without a system that has a positive expectancy. This is clearly gambling according to our 2 prong test above, as it is uncertain whether you will make money over time. So in this example, you can see that even though you are “trading” a financial instrument, what you are doing is still considered gambling. Expectancy type could settle the dilemma. To address the issue as to whether binary options are gambling or trading, you have systematically look at each category of binary options and decide whether you can develop a system that has a positive expectancy or not. If there does not exist a system of trading that has a positive expectancy, then you are gambling and what you are trading is not a financial instrument. If on the other hand, you can develop a system of trading that has a positive expectancy, then you are trading and what you are trading is a viable financial instrument. If you take a look, on the surface, at trading binary options through an OTC (over-the-counter) binary options broker, it would appear that you may be gambling.

This is because, on the other side of each of your trades, is the broker. The odds are in the broker’s favor. This is because you can only be the buyer of the binary options. You can either buy a put or a call. If you win you will always profit less than what you risked. For example, in the language of most binary options brokers, you can make 80% return if you are right. This means that you will have to risk $100 to make $80 and if you are right 50% of the time, you will have a negative expectancy. The broker, on the other hand, will have a positive expectancy. The only way that you can make money over time when your reward is less than your risk is ONLY if you are able to develop a system of trading that increases the percentage of winning trades to a point at which you will have a positive expectancy. Exclusive: Israeli Regulations Lead to SpotOption Halting Binary Options Activity. Chairman of Israeli Financial Regulator Hauser to Resign in Early 2018. Is Trading Binary Options Gambling?

If you look up binary options online, the search results page will, unfortunately, largely consist of scammy results and also a sprinkling of articles on different sites urging people to stay away from binary options on the basis that it is “gambling.” It’s easy to get a mixed impression of binary options trading from this, since if you look at those scammy results, you might get the same vibe those cautionary writers received. Is binary options trading gambling, or investing? Is it safe? Wikipedia defines gambling as any wagering of money on an event which has an uncertain outcome with the intention of winning more money . That’s a pretty broad definition. You could, in fact, define pretty much any investor as a gambler by that definition, even those people on the floor of the stock market, and even those investors who are so good at what they do that they make a living from it. Indeed, you could even extend this definition of gambling to cover any business venture, since ultimately there is no such thing as a risk-free business. Any time you put down money on starting any venture in the hopes of making more money, you risk losing your starting capital. That’s even true if you’re just trying to open a restaurant or dry cleaner’s. So yes, binary options trading is gambling. But so is everything else. With that in mind, can we come up with a more useful definition of gambling and examine binary options trading in light of that definition? Perhaps a better way of looking at it would be as follows: gambling is any wagering of money on an event with an uncertain outcome without mitigating risk. Risk is one of the few certainties in life—you can’t get rid of it completely.

But that doesn’t mean that some risk can’t be managed. Risk management is an important tool for any serious trader. It’s closely related to money management, which is important for any serious trader or gambler. TOP RECOMMENDED BROKERS. Let’s consider different types of games you find on the casino floor. A game like roulette has unmanageable risk. There are things you can do to make your bankroll go further (money management), but there’s nothing you can do personally to influence whether the wheel is going to land on red or black. A game like poker on the other hand is something you can directly influence. It still involves risk, but you can do more than manage your bankroll. You can also reduce your risk by applying your skill at the game to influence the outcome. That’s why there are a few professional poker players out there. But there’s no such thing as a professional roulette player.

There are roulette players who are responsible and irresponsible, though. That comes down to money management and understanding risk. The only truly irresponsible gambler is one who refuses to acknowledge the risk or manage his or her bankroll. Find out if Binary Options Trading is a high or low gamble with a Free Demo Account at MarketsWorld. com! NOTICE. BinaryTrading. org has financial relationships with some of the products and services mentioned on this website, and may be compensated if consumers choose to click on our content and purchase or sign up for the service. – U. S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risks. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to BuySell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site.

The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC rule 4.41 – hypothetical or simulated performance results have certain limitations. unlike an actual performance record, simulated results do not represent actual trading. also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. no representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Please note: All content on this website is based on our writers and editors experiences and are not meant to accuse any broker with illegal matters. The words Scam, blacklist, fraud, hoax, sucks, etc are used because all content on this website is written in a fictional, entertainment, satirical and exaggerated format and are therefore sometimes disconnected from reality. All readers must personally judge all content and brokers on their own merits. Additionally, visitors comments are not moderated other than the obvious link spam. People lie.

Use your discernment. DISCLAIMER: Trading binary options is extremely risky and you can lose your entire investment. Only deposit and trade with money you can afford to lose. Always refer to local laws, jurisdictions and authorities before performing any action on the internet. The content on this website is NOT financial advice and by use of this site you agree to hold us 100% harmless for any loss. How To Spot A Binary Option Gambling Problem. 5 Ways to Spot a Binary Options Gambling Problem. Anyone who trades binary options or is thinking about it has probably heard many times now that binary options trading is nothing more than gambling. When you search for information on binary options online, you will inevitably get back results like this one over at Forbes that may cause you to wonder if you are doing the right thing trading options. Odds are that you’ve also had friends or family members who have lost money trading online who will try and talk you out of trading, saying that it is no different from going to a casino and risking it all on roulette. Is binary options really gambling? The answer to this question is not so black and white.

It is neither a “yes” nor a “no.” It is more like a spectrum, and where you fall on that spectrum depends on your approach to trading. Some binary options traders really are gamblers, trusting entirely to luck for profit or loss. Other traders are on the opposite end of the spectrum, doing all they can to reduce their exposure to risk and profit from patterns in the markets. These traders treat binary options like a business. Many traders fall somewhere in between. Here are 5 ways to spot dangerous and addictive gambling behavior. If you find yourself doing any of these 5 things, it’s time to step back and take a break. Trying to “win it all back.” This is one of the most common gambling patterns you can engage in. When you lose a trade, how do you feel? Most people will experience depression, confusion, or even anger. It is common in these situations to feel a need to get revenge on the market. You may think you need to make up for the loss as quickly as possible. So you might find yourself trading outside your rules, maybe jumping into trades based on setups that do not really meet your criteria. You may invest more than you should, and when you lose another trade, you become even more determined to get revenge.

You can dig yourself into a deep hole very quickly this way, and, sometimes, you can lose everything and not be able to dig your way back out. This is a form of addictive behavior. If you feel angry or desperate, it is not the right time to be trading. Take a break, look over the trade you lost, and try to understand why you lost it. Once you know, you will not make the same mistake twice. When you are levelheaded, you are less likely to accept poor setups and lose even more money. Remember, the market is not a conscious organism. You cannot really get revenge on it, and it does not care whether you win or lose. But it is hungry for your money, along with everyone else’s. Respect the market, but try not to fear the market. A calm, collected trader will become profitable, while a desperate, angry trader will lose it all. Pulling money away from other obligations. This is another sign that you are addicted to gambling on the binary options markets. Do you find yourself siphoning money you would spend paying bills, buying groceries, or taking care of other necessities into your binary options account? What about money you would normally set aside in a savings account for the future, money you would not touch for any reason?

You have other obligations and priorities you should not violate in order to trade binary options. Your binary options account and your other accounts should be kept separate at all times. Once you start moving money into your trading account that does not belong there, you are not leading a balanced life anymore, and you are allowing your addiction to trading to harm other aspects of your life. If other people depend on you, like a spouse or children, you have an obligation to take care of those people first. You also should not pull money from your savings account to add to your trading account to counteract trading losses. That is like treating the symptom and not the disease. Figure out why you are losing trades and make changes to the way you trade that reduce your losses. Don’t just add money to your account and pretend nothing is happening. You can move money into your binary options account, but you need to do so in a controlled fashion. Once you have paid all your bills for the month and met your savings quota, then you can consider transferring leftover, additional money, to your trading account to finance your trading activities.

If you haven’t paid your bills or met your quota, you cannot add funds to your trading account. Wagering arbitrary amounts of money on trades. When you see a really, really great trade, do you wager more money on it? Do you maybe risk 10% instead of 5%, even though you wager 5% on the rest of your trades? This is a form of gambling behavior which can have disastrous results. First off, you are not trading consistently. When you do not set appropriate rules for yourself, you may find yourself doing more and more random things. Next, you might trade 20%, maybe 30%. Imagine losing a third of your account on a single trade. Secondly, it implies you are taking trades you do not consider to be really, really great. You should only take the best trades, and you should always wager consistently on them. Breaking your trading rules. Just as you should not be breaking your money management rules, you also should take care not to violate other trading rules. Those include the rules of your trading system and other rules you set up for yourself involving scheduling and other aspects of trading.

These rules keep you focused and reduce randomness. When you break them, it is like opening the door and inviting chaos inside. Chaos produces losses more often than wins. Remember, entropy is the law, and disorder causes loss. Your trading method is a little sphere of order in which to conduct your affairs. When you start putting chinks in the walls, that sphere collapses, and with it, your trading account. Avoiding talking to family members or accountability partners about trading. This is one of the biggest signs that you have a problem. It is wise when you are trading to make yourself accountable to someone. If others depend on you, you are always accountable to those people. It is your moral obligation to ensure you are taking care of them first.

If you do not have any dependents, an accountability partner might be a mentor or a fellow trader, or just a friend who takes an active interest in your trading and wants to help you stay focused and on track. If you are avoiding your accountability partner, or not being honest and upfront with family members about where your money is going and how you are conducting your trading affairs, you probably have a guilty conscience. You are worried about letting those people down, which means you have already let yourself down. Come clean with your accountability partners, and let them help you work through your problem and stay honest. That is what they are there for. Note that even if you approach trading like a business, you are still engaged in a business of risk, and you still can and will lose money while trading. There is no trading method that can give you a 100% win rate. In fact, recognizing your risk can actually reduce your losses, because it gives you a realistic perspective and keeps you honest and involved in your trading. In that sense, even traders at the far, far end of the spectrum who are not engaged in dangerous gambling behavior are still, to a limited degree, gambling. But that is the case with everything in life. Life itself is a business of risk, and you can never completely predict what is coming or understand what is happening. Any time you invest money in a new business venture, you are facing a level of unpredictability.

Binary options trading does tend to tempt participants into addictive behaviors and other mistakes, but if you stay alert for changes in your own behavior, you can avoid falling into gambling traps while trading. Acknowledge your risk, but do everything in your power to reduce it, and you will be on the path that leads to success. Ensuring you don’t have a gambling problem can be done by simply reviewing your character. Check it out. NOTICE. BinaryTrading. org has financial relationships with some of the products and services mentioned on this website, and may be compensated if consumers choose to click on our content and purchase or sign up for the service. – U. S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risks. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to BuySell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site.

The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC rule 4.41 – hypothetical or simulated performance results have certain limitations. unlike an actual performance record, simulated results do not represent actual trading. also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. no representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Please note: All content on this website is based on our writers and editors experiences and are not meant to accuse any broker with illegal matters. The words Scam, blacklist, fraud, hoax, sucks, etc are used because all content on this website is written in a fictional, entertainment, satirical and exaggerated format and are therefore sometimes disconnected from reality. All readers must personally judge all content and brokers on their own merits. Additionally, visitors comments are not moderated other than the obvious link spam.

People lie. Use your discernment. DISCLAIMER: Trading binary options is extremely risky and you can lose your entire investment. Only deposit and trade with money you can afford to lose. Always refer to local laws, jurisdictions and authorities before performing any action on the internet. The content on this website is NOT financial advice and by use of this site you agree to hold us 100% harmless for any loss.