You may, like me, have been bombarded in recent weeks by unsolicited emails extolling the great benefits to be had from something called ‘The Brit Method’, which offers an unrivalled chance to earn many thousands of pounds.
However, a little investigation reveals that the Brit Method is not all its promotors have cracked it up to be. Well, what were the chances? It seems to be a piece of software which analyses markets and helps its user to be able to trade successfully in binary options. The first question that springs to my mind is – “what are binary options?”
A binary option is a financial investment in which the payoff for getting it right is a fixed return, or nothing for getting it wrong – that’s the binary bit. It’s pretty much like placing an ante-post bet at the bookies, where you think an asset price is going to do something by a specific time. They could be applied to anything, from currency movements to share or commodity prices.
There are two main varieties of binary option to choose from called cash-or-nothing or asset-or-nothing.If the cash-or-nothing option proves to be correct, then the investor will get a fixed cash payout if the asset prediction time expires with the option ‘in-the-money’, or correctly called. Same as if the horse you put the ante-post bet on wins.
The asset-or-nothing investment pays the value of the security that the option was predicted on. So if the call was that a company share price was predicted to rise to 50p at the close of the market on Friday, then if the price turns out to be 55p, then that is the value that will be paid to the investor.
Other names for binary options depend on where they are traded. In foreign exchange trades they are often known as digital options, fixed return options on the US stock markets, or more generally all-or-nothing options.
Binary options brokers are often unregulated, so potential investors should be aware of that fact before anything else. There has been some alarm in the US in particular, that people offering their services as brokers, are nothing of the sort and one large player has been ordered to stop and repay the losses its customers suffered.
Anyone interested in getting into binary option trading should investigate whoever is offering their services is a properly licensed and regulated company.A look at the EzTrader website for instance announces that it is authorized and regulated by the Cypress Securities and Exchange Commission.
A comparison analysis including EzTrader review found that they are one of the oldest traders and EzTrader Assets cover the full spectrum of stocks and shares, currency pairs, indices and commodities.This means that whatever asset the investor fancies taking a binary option call or put position, the platform will accommodate them and they can test their analytical prowess.