Binary Options are now some of the most popular trading instruments online alongside Forex. This derivative instrument has grown so much over the last two years thanks to increasing legalization and acceptance by various financial regulatory authorities across the world.
A few years back, binary options were not recognized as financial instruments but that changed in 2012, when Cyprus Securities and Exchange Commission “CySEC” revealed that binary option were fully recognized, authorized and regulated financial instruments in the country, and by extension in the EU.
Since 2013, many binary option trading brokers and platform providers have acquired licenses to conduct business in the EU, UK, Australia and Asia. Other countries are also beginning to recognize binary options as financial instruments, and this is increasing their global popularity.
Can you make a business trading binary options?
To many people, binary options are just a means of earning extra income while trading part time. However, for the clever ones, and especially those with advanced expertise, trading binary options is a business and one that they do full time.
So how exactly do they do this? Well, you can trade binary options full time with you own money and make profits. A good number of full time traders have taken this option. However, there are quite a few that see binary option trading as a business and have thus established a clientele for whom they trade on their behalf.
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This means that novice investors, or investors not interested in engaging the market on a daily basis deposit funds with these expert binary option traders for a fee. They then agree on compensation basis in terms of return depending on the amount of money they invest with the expert trader.
For instance, some expert traders will ask for a one-time sign-up fee, say $500, then novice traders are asked to deposit anything from $3,000 to $50,000 with the trader from which they can expect a certain weekly return. The expert trader is compensated by retaining some percentage of the average weekly return or a fixed figure depending on the terms of agreement.
Now, as an expert trader, you would want to use the best brokers in terms of payout, tradable assets, platform, and trade types, among other features. For instance, OptionsXO, which is one of the leading binary options brokers offers traders an opportunity to trade in more than 100 assets including stocks, currencies, indices and commodities, and runs on one of the best binary options trading platforms developed by TechFinancials.
The other thing that traders should check about their broker is how current/former traders rate them. This can be easily achieved by looking at the broker’s social network pages where clients tend to interact. For instance, they can check OptionsXO Twitter account, or their Facebook account. That way you can establish whether or not the broker is a scam.
The other issue that traders should look out for when selecting their broker is regulation. Even though many brokers are now regulated by CySEC and other regulatory bodies, some are still not regulated. Regulation gives some level of protection against financial loss in the unfortunate event that a broker goes under. As such, an expert trader would not want to lose client’s money to such a broker as this may taint their name in the business as a binary options expert trader.
Most of these expert traders operate as individuals trading on behalf of others, but others are a group of traders operating as an entity. This means that they have a business registration which also gives them a better appeal to novice investors than individual expert traders.
It is also advisable that as an expert trader you start by helping out those close to you to establish your reputation. You cannot expect a stranger to trust you with their money just based on a compelling resume of trading activity that you display on your profile.
The bottom line is that most players in the binary options market view it as a part time money making opportunity, but there are those that have taken this opportunity seriously and made a business out of it.
In fact, most people who say they have become millionaires trading binary options have done so by taking it as a business rather than a part time activity.
Trading the money of other investors (acting as a binary options money manager) also helps you in boosting your income through commissions and subscription fees.