When coming to trade binary options, many traders wonder whether it is possible to really make money here, and whether this market is something like a financial pyramid. How to figure this out? Yes, very simple. If the system really allows you to earn money consistently, then each of its participants should be able to receive their own income.
A lot has been written about how a trader earns his income. But, in general, it all comes down to the fact that you need to guess where the price will go in the near future, make the correct forecast and purchase the appropriate option. And here everything is really transparent. But how does a broker offering binary options make his money?
It must be said right away that binary options brokers, as a rule, make money in a non-standard way. To better understand this, let’s first look at the standard way of making money as a “classic” broker.
Some brokers work only with classic transactions, others only with options, and still others with both. But the main thing is that the broker provides those opportunities that will be most interesting to you specifically.
How does a binary options broker actually make money?
If you come to trade, for example, on Forex or the stock market, then most brokers will openly tell you how they make money. Because, in general, there is nothing complicated or secret about this, and any trader can himself notice the source of income of such a broker.
The principle here is the same as at a currency exchange office. As a rule, exchange rates are always posted near such a point: for example, buying dollars for 28 rubles, selling for 29 rubles. In total, for every dollar that passes through the system, the exchanger receives a ruble. It is not difficult to understand that if there is a queue of people wanting to exchange their money at such a window all day, then the profit can be quite substantial.
It's absolutely the same with brokers. For example, if you want to buy euros, you will find that the purchase is at 1.2010, while the sale is at 1.2015. Most often, the difference between the cost of buying and selling (called the spread) ranges from 3 to 10 points. And no matter what you do, you will still have to pay this spread, because any operation involves two transactions: first a purchase, then a sale, or vice versa. And regardless of whether you receive income yourself or not, you will bring it to the broker.
A classic broker is almost not interested in clients' winnings, but is only interested in them making as many transactions as possible and bringing in new traders. “Almost” - because, of course, a successful trader will make transactions constantly and for a long time, and an unsuccessful one, who loses all the time, will eventually give up and leave. For this reason, many brokers offer training, advice, bonuses and many other things that can somehow improve a trader's trading profitability and encourage him to make trades and refer friends. But the main goal of the broker still remains the same: to ensure that as many transactions as possible pass through the “exchanger”.
Most traders have noticed that in the first seconds after purchasing a currency or stock, as a rule, your potential profit is not 0 points, but somewhere around -5. This just means that you paid a spread that set you back a little.
Checklist: what you need to make money on the stock exchange on BO
Tips and the secret of how to successfully make money on binary assets directly depends on simply being inactive at an unfavorable moment for trading. Most of the time (about 80-95%) you will just have to wait and do nothing. Only when a good signal appears (buying/selling options clearly according to your strategy) should you act - enter into a deal and wait for the result.
At the same time, it is important to take a responsible approach to earning money, and only then will you start earning money on a regular basis.
3 categories of people who trade or have traded binary options:
- stable profit is a reality (such people set a goal, define a strategy, follow money management and continuously learn - therefore they smoothly achieve financial freedom);
- distrustful attitude (they don’t believe that they can make money and consider options a scam - they used to think that they would be able to easily earn millions thanks to luck);
- ignoring opportunities (they realize that it is possible to accumulate money on options, but they do not have the desire or time to learn and delve into the intricacies of strategies).
Tricks of binary options brokers
Do binary options brokers charge spreads? As a rule, no. Most of these brokers advertise as one of their advantages that they do not charge any spread. If there was a spread, it would look like an offer to buy a Call option, for example, for $101, and a Put option for $99. But in practice this does not happen. Brokers who take something like this without warning traders about it (and this happens) are clearly unscrupulous, and it is best not to work with them.
In addition to the spread, some brokers may also charge a swap, that is, a fee for transferring an open position (in this case, an option) to the next time period, for example, to a new day. However, large advanced brokers, as a rule, do not accept swaps either, which is also notified to traders.
But commissions for depositing and withdrawing funds can bring some additional income to the broker. On the one hand, such commissions are undesirable for a trader. But on the other hand, often input and output operations require the broker to pay a commission in favor of the system with which the exchange takes place. If a broker takes a commission within the limits of his own break-even from such operations, then it is quite understandable.
However, all these income items, with the exception of the spread, cannot be the main source of earnings. Therefore, the conversation about how binary options brokers really make money is still ahead. And here there are two options.
How to understand that a broker is reliable
All conditions are specified in the contract. If the client is not legally protected in any way, if the broker foresees on paper a “software failure” and can unilaterally terminate work with the trader at any time, then you should stay away from such companies.
Don’t be lazy and take the contract to any lawyer. Gray areas and ambiguous text; infringement of client rights; the lack of legal protection in a Russian court - all this should alert a literate person when trading binary options.
Brokers - bookmakers
In fact, many brokers are not brokers at all, but are essentially bookmakers. The difference is that they do not bring clients' trades to the market, but play purely on the difference between the number of wins and losses. Bookmakers don't care how they make money, but price charts are a really great solution for them for several reasons.
Firstly, price charts are constantly moving, at least 5 days a week, while interesting sports competitions do not occur every day.
Secondly, most novice traders, of course, lose because they frankly do not know how to analyze the market and rely on luck, essentially turning options trading into a casino. In any casino there are always more losers than winners, and this is exactly what allows such a “broker” to make money. If we talk about buying an option for a period of 5 minutes in the hope that its price will become higher/lower by 1-2 points, then this is a pure casino, because it is simply impossible to make a normal forecast for such periods. And this is exactly what brokers often actively offer.
At the same time, a good broker-bookmaker does not deceive anyone. If you win fairly, he will pay you your money fairly. If you lose, he will take it honestly. There are no direct ways to find out whether a particular broker is a bookmaker, because outwardly everything looks exactly the same. You can only rely on indirect signs.
As a rule, there is no refund of part of the money if you lose. It is not profitable for bookmakers to do this, because this is an additional huge expense item.
Having analyzed the website of the broker-bookmaker, you can see that it is very much “tailored” to attracting new clients. Promises (often groundless) of quick success for everyone, a powerful affiliate program with very high returns. For a bookmaker, a large number of inexperienced traders is always preferable to several dozen professional ones, since the latter can ruin him, and newcomers will always bring profit.
Often such brokers offer especially successful traders an affiliate program on especially favorable terms. That is, they suggest switching from trading to searching for new clients. This suggests that this is definitely a bookmaker, since professional traders will never interfere with a real broker either.
Finally, the bookmaker always offers very small amounts to get started, a minimum deposit size, because, as already mentioned, the most important thing for him is to attract many players and create excitement.
A broker-bookmaker can exist quite comfortably, because in most cases the ratio of winning and losing transactions in such a market is 3:7, or even less.
Making money on BO - is it possible to do it, real reviews of successful traders and their opinions
It will be useful to study real reviews from beginners who have been trading binary options for several years: the opinion of experts can be a good inspiration.
1. Yuri Gavrilov has been trading for more than 3 years, and before that he played on the Forex market and dealt with stocks for another 2 years. He started out following a typical pattern: he lost deposits until he understood the importance of strategy and emotional control. Therefore, in binary options I started on a demo account and quickly switched to a real balance. Inexperienced participants are advised not to rely on luck, instead using long-proven strategies.
2. Maxim Medvedev also left his review about options trading. For him, this is a full-time job that cannot be treated as a lottery. To achieve results, you need to work. By switching to real agreements, the professional risked only 3% of the total volume for insurance in the transaction. He also recorded each transaction in a separate journal and analyzed them at the end of the day.
3. Artem Soloviev offers his own version of how to trade profitably in binary trading. Several times he fell for scammers who, in reality, had nothing to do with financial markets, but still chose a decent company. It is still difficult for him to control his emotions, but he has a stable income (about 7-10 thousand rubles) per week.
Beginners do not need to consider binary options a scam or a game.
You should not assume that you will be able to immediately get financial returns without effort and maintain this pace. This goal should be achieved gradually and consciously: thus, the question of whether it is realistic to make money using this method will cease to be a mystery.
True Binary Options Brokers
A true broker is one who uses his clients' money to make his own trades in a particular market. That is, if you bet on the rise in price of gold, he takes your money and enters the commodity market with it. If you play on stocks, then, accordingly, the broker works on the stock market, if on currencies, then on Forex.
Binary options are convenient for a broker because you immediately give him your money in the form of the option cost. The moment you buy an option, you are immediately charged, for example, $100. And only after the option expires, you will either receive $160-180 back, or you will receive $0-15 in compensation for losses. The ability to use your money is exactly what the broker needs all this for. The mechanism at work here is as follows.
Having collected, for example, $100,000 from 1,000 traders, the broker can use this amount to make his own trade on the underlying asset on which these traders are working. For example, in the gold market. With this large amount, the broker can make a solid trade with a large potential profit. Naturally, decisions regarding the purchase or sale of an asset are made by the most experienced traders who are part of the broker’s company staff.
Then the situation unfolds as follows
If the broker wins his trade, he shares the profit with those traders who correctly identified the price movement. According to statistics, such traders are almost always less than 50%. At the same time, the money of traders who made an incorrect forecast becomes the full property of the broker. Whether he pays them a portion in the form of compensation or not, this does not significantly affect the broker’s profit. If the broker wins a deal of this level, then he receives a profit that is not comparable to what traders receive.
If he loses his trade, he loses less than he would have received if he had won. This is the law of managing your finances. In this case, he also pays the winnings of the first category of traders and receives money from the second. Most brokers plan their trading in such a way that if they lose, they will receive a loss that would be completely or almost completely compensated by the money of the losing traders.
From all this we can say that a broker who offers options ultimately receives extremely favorable trading conditions for himself in a particular market, because he always has a powerful “safety cushion”: no matter which way the price goes, some traders will be losers and their money can be received as compensation.
In addition, brokers can use the following techniques
- Firstly , there is an offer to make a transaction only in one direction. These are One Touch options. At each moment, the broker offers, of course, those options that are in one way or another related to his plans. For example, if he wants to bet that the price will rise to the 1.80 level, then he will invite traders to bet that the price will reach 1.85. If the broker loses, he will take ALL the traders’ money down to the last ruble and will not owe anyone anything.
- Secondly , it’s a game both ways. For example, one position is opened to sell euros, and another to buy.
Whatever direction the price goes, one of the transactions will be won, and the second will be compensated by the money of the losing traders.
As you can see, a true broker also has very good opportunities for earning very large amounts.
There are several indirect signs of such a broker.
Such companies encourage traders to place large bets. The higher the value of each option, the more of the underlying asset the broker will be able to buy or sell.
In addition, they are characterized by constant updating of the “range” of options. As already stated, this has to do with what the broker is going to do. For example, now there is an offer to buy an option to increase the euro level by 50 points, and tomorrow, instead of such an option, it is already offered to buy an option to decrease the franc by 70 points. All this indirectly reflects the broker’s own activities.
Intrade Bar – reviews from real people
We collected reviews of the Intrade Bar broker from social networks VKontakte, Facebook, Google+ , as well as real screenshots of payments and transaction history.
Review by Roman, Kazan I have been trading for the third month in a brokerage office. I have already withdrawn profits to the card three times, usually the money arrives 2-5 minutes after withdrawal in the account. I liked the broker’s technical support and personal consultant - they always give me advice and answer all my confusing questions sensibly) I have already tried five different brokers and decided to go with IntradeBar because of its user-friendly interface, demo account for testing new strategies and the ability to place bets from 50 rubles Glitches on the platform are extremely rare, and delays in opening and closing trades are less than with other brokers. Not to be unfounded, here are my latest findings on the map:
Review by Timur, Kazakhstan I’ve been studying how to trade options correctly for a month now and have already tried working with another company. I was drawn there by an acquaintance of mine who handles sums of thousands of dollars. He said that she was the most reliable and could withdraw large sums without any problems. I wasn’t happy with their minimum bets of $24; the money ran out quickly. Such a broker was not suitable for training, and I found out on the Internet about Intrade Bar with a minimum deposit of only 500 rubles. I found a bunch of negative reviews from real people about IntradeBar online and at first I was afraid to get involved. But a week ago I tried a brokerage demo account - I really liked the platform, compared to the inconvenient 24 Option, but trades are opened a little slower. Next week I’ll put in a trial 1000 rubles and trade using my system. If I make a profit, I will immediately withdraw it. Withdrawing profits is the main test for a broker.
Review by Indi, Moscow Intrade Bar has a working platform with almost no brakes. For me, the downside is the maximum transaction limit of $500, since I myself use Martingale in my work. In general, the broker is designed for intermediate level traders and beginners, so you can master the interface and understand trading in a couple of hours. But to learn how to trade profitably you need much more time) I read a lot of reviews from real people about Intrade Bar. Those who constantly complain that binary options are a scam for suckers are simply betting on luck, like in a casino. People who study technical analysis, follow the news and follow their trading strategy will be able to make money.
Reputation and reliability of the broker
As a rule, professionals pay special attention to this point. And it’s not surprising, because they most often invest significant sums in trading, so they count on some kind of guarantees.
Beginners in most cases look at this more superficially. Often they are even annoyed by the broker’s requirement to provide identification documents, place of residence, and ownership of a certain credit card. A person who has come to work seriously will not be against such authorization in order to receive additional reliability in return. Serious brokers may not allow “unknown people” to trade at all. It is important for them that every trader can be identified and be aware of responsibility for their actions.
At the same time, it is very important for a trader to be able to prove that it was he who performed specific transactions at a certain time. All this makes it possible to protect your rights in case of disagreement, so do not neglect the broker’s requirement to identify your identity.
As for reputation, you should pay attention, first of all, to reliable brokers who have been working for several years. They do not offer instant enrichment, but they do talk about the possibility of calm and comfortable work. A real trader doesn't need anything else.
Minimum deposit and option amounts
The minimum deposit amount, again, is of great concern to beginners. I would like to start playing by depositing as little money as possible into my account, for example, one dollar. But in any case, almost any broker gives you the opportunity to start with a deposit of 100 dollars or euros. This is not too much money, and if you decide to play seriously, you can always find it.
If you are just trying, then you don’t need any money at all - trade on a demo account. This is a great opportunity to learn without losing.
As for trading with real money, the minimum cost of an option is much more important. Why?
Some brokers offer to start playing with a deposit of ten dollars, despite the fact that the minimum option costs five dollars, if not ten. Naturally, it is completely unacceptable to start playing under such conditions. After all, one or two failures and all your money is gone. This fundamentally contradicts the principles of competent deposit management. According to these rules, the maximum loss at one time cannot exceed 10% of the entire deposit amount.
Binary options, by the way, are good because they allow you to regulate risks and profits like no other type of trading. Therefore, if the minimum option costs ten dollars, then you need at least a hundred to get started. If the minimum lot is $25, then you need at least $250. In other words, an experienced trader looks not so much at the minimum deposit, but at the minimum lot to calculate his deposit management strategy.
Important tips for a beginner - how to trade profitably, where to start as a beginner
In the past, options trading for beginners was designed to hedge risks—to reduce uncertainty in the event of a market crash. Thus, the issue is still in high demand for large bidders, since it is difficult for them to sell large positions, and inaction is sometimes considered an excellent option.
Therefore, beginners need to take note of proven tips on how to trade correctly on the chosen trading platform:
- statistics of any transactions are taken into account (not a single one, but 5-7 agreements in a row, especially profitable ones - from 50-100 agreements);
- never give more than 5% (it is recommended to stay within 1-3%) of the amount of starting capital, so as not to test your luck once again and understand how to play binary options, and most importantly, make money on them;
- pay attention to the details in order not to waste the entire amount of your contribution into the deposit for trading (to do this, just try not to lose, or at least lose less than you win, and then you will automatically gradually earn money).
These tips, together with the approved basic tactics, determine whether you should expect to make money or not. The main thing is that any binary options trading is well insured.
Rating of the best binary options brokers
First in place
The ProfitPlay broker is in first place in our rating.
It has a convenient platform and an understandable website entirely in Russian.
ProfitPlay is a Russian options broker operating in the financial trading environment since 2015. This trading platform offers modern services for making money on binary options, which the company is constantly modernizing.
Second place
Next comes 24 Option.
It collects many reviews as a reliable binary options broker.
For trading: it is possible to buy contracts with an expiration date of 5 minutes. You can trade from mobile devices. Trades can be closed early, reducing losses or fixing profits.
By deposit: in order to trade, you need to top up your account with an amount of $200 or more, with transactions starting from $24. The broker accepts almost all types of payments popular in Russia.
For training: You will be able to access special training materials that will help you master the necessary knowledge, such as webinars.
Third place
The broker IQ Option took third place in the ranking.
Users like it because it allows them to receive a refund to their account in case of unsuccessful transactions.
For trading: up to 45% of the money can be returned to your account if you lose. There is access to many underlying assets and options types. The platform itself is bright and fast.
On a deposit: when you top up, you receive a bonus of up to 100% of the amount deposited into the account.
For training: the platform offers a demo account with no time limit. Webinars are also available.
Fourth place
Binomo is firmly established here. The peculiarity of this operator is its very high maximum profitability.
On trading: if you win, you can get up to 650% profit, although such profitability always comes with a lot of risk. There is a possibility of doubling and extending contracts. You can trade not only individual types of assets, but also pairs.
By deposit: when you replenish your balance, you receive up to 100% bonus to your account.
For training: a standard set of training materials - several videos and an e-book on the topic of options trading.
Fifth place
OlympTrade closes our top five.
You can make transactions with it from just 1 US dollar.
For trading: it is possible to purchase contracts with an expiration date of only 1 minute.
By deposit: In order to start trading with this operator, it is enough to top up your account with 10 US dollars. This is one of the leaders in terms of the minimum deposit amount. When you top up, you will receive a deposit bonus ranging from 30 to 100% of the amount you deposited. Reviews can be read both on our website and here - https://www.olymptradeotzivy.com
We hope that this rating will help you choose the best binary options broker to trade successfully.
How do you deposit and withdraw money from the trading platform?
This is one of the most painful issues for traders. Because you will only be willing to work if you can deposit and withdraw money quickly and without difficulty.
The concept of “simplicity” has several components.
- Input and output options. The more there are, the better. For example, this could be bank cards, electronic money (for example, WebMoney). As a rule, this is more attractive than postal or bank transfers. Therefore, it is worth paying attention to what the system accepts and where it allows you to transfer earnings.
- Speed. Ideally, this should be 1 second, but in practice (especially with output) things are not so rosy. Some brokers make withdrawals once a week or month, others can guarantee the receipt of money on your card or account only after a few days.
- Commission. Not all brokers have it, but it is common. So it’s also better to think about this when making a choice.
Minimum deposit with which you will be allowed to work
It may also differ: one broker has tens of dollars, another has hundreds. Brokers of the first type are more popular because they are more accessible to traders. For beginners, the opportunity to start trading with just one dollar is especially attractive.
Terms of transactions
This concept also includes a lot. For example, the minimum lot that you can play. In the case of binary options, there are a few more points worth noting.
The minimum and maximum validity period of the option (several minutes, hours, days).
Refund of part of the funds in case of loss. For example, some brokers return 10% of the option price if the forecast does not come true.
The ability to indicate not only the direction of price movement, but also the range of its movement, depending on which earnings will change.
Trading platform
Many brokers rely on the fact that their trading platform does not require downloading, but is available online. However, for 90% of users this does not matter, because they work from the same computer and, if anything happens, they can install the necessary program.
Another important thing is how convenient this platform is. And, first of all, for technical analysis. Absolutely any platform of any broker is suitable for making a transaction, because to do this you just need to select the price direction, the amount and click the “Buy” button. But not every broker makes its platform high enough and suitable for conducting serious technical analysis. It requires using a sufficient number of different tools and indicators.
Please note that you can use other platforms and programs for research; analytics can also always be viewed on third-party sites. Experienced traders have their own base of sources for forecasts and news, so they are unlikely to be interested in what the broker offers. This can certainly help newbies.
However, if a broker offers its information about the market, this does not prevent you from looking for other options “on the side”. After all, the more sources, the more accurate the information. And in any case, there is never too much data, and the trader’s task is to find those experts and analysts who make mistakes as rarely as possible.
Is free training and demo account available?
For a beginner, it is very important to receive training from a broker. Many people come and immediately want to trade. But this is tantamount to coming to a construction site and immediately working, without experience or understanding of what and how to do.
Therefore, if you are a beginner, then look for a broker that offers educational materials. The best thing, of course, is not just links to videos that are freely available, but the opportunity to chat with an expert online, ask questions, and get advice. A broker who cares so much about new traders is really good.
Having a demo account is also a very good indicator of attentive attitude towards your clients.
Is there technical support?
Being willing to answer any questions is extremely important for a trader. Make sure you can get a detailed answer to a specific question in a language you speak well.
Do not hesitate to ask technical support a lot of questions from the very beginning to evaluate the speed and information content of the answer. From this it will be possible to draw a conclusion about how much assistance you can count on from the broker.
The essence of trading and real examples for dummies
There are several methods for prematurely predicting changes in asset prices on financial markets.
To understand how a beginner can make money on binary options, you need to make forecasts of the movement of the selected asset using one of the types of analysis:
- Technical. Its essence comes down to building different levels, channels, searching for trends, moving averages and related indicators, and based on these tools in the future, a strategy for concluding transactions is formed.
- Fundamental. Or trading on news, automatically provokes a change in the values of assets on the market, company shares and is accordingly displayed as fluctuations on the chart.
- Psychological. It takes place on the basis of taking into account the psychology of active market members, which allows you to figure out where the asset rate will go - down or up for the next period.
Buying or resell an option is no more difficult than a typical futures transaction, since it is carried out through a broker. Having received a buy option as an application, the broker sends it to the exchange core or places it in the exchange order book at the specified price. To reduce slippage, it is worth making sure that the order book is filled with counter orders - this gives you a chance to carry out an operation with the asset later at a predetermined cost.
One example of an option would be Sberbank shares: they can grow, but it is not known enough to simply buy them at a profit. As an option, it is worth purchasing a delivery option for a clear period, during which further growth is expected. Then the counterparty will be forced to sell Sberbank shares at the price that was fixed in the agreement. When completing a transaction, it is worth paying a security deposit (deposit).
But if a mistake occurs and the bank’s shares decline, there is no point in buying these shares at a loss and you can simply not use your own right, leaving a deposit.
