Binary Options FAQ – Important Questions Covered

Anyone looking to get started in the world of binary options trading would be wise to ask questions… a LOT of questions. While it’s true to say that practical experience teachers traders many of the key lessons they’ll learn along the way, it is nonetheless crucially important to know what you are getting yourself into and how it all works, before getting started.

Regardless of whether you intend to trade casually in your spare time or dedicate your entire career to binary options trading, knowledge is power. This applies to both your knowledge of binary options trading in general and the work you are willing to put in with regard to market research, analysis and so on. The more you put in, the more you can expect to get out as a result.

So with this in mind, what follows is an introductory binary options FAQ, covering just a selection of the most important questions and their respective answers:

What Are Binary Options?
In the simplest of terms, binary options are a type of trading where there can only ever be one of two outcomes. Binary options take their name from the fact that you as a trader selects from one of two possible outcomes – the results of which being something of an ‘all or nothing’ win/lose situation. This makes them considerably easier to work with and understand than most other types of trading and investment opportunities. In addition, binary options represent fixed-price contracts which pay specific returns that are non-flexible.

When Can I Trade Binary Options?
The vast majority of binary options brokers operate during the same times as global markets. This means that trading in most instances can take place 24 hours a day, starting at 10.00 PM Sunday evening and finishing at 8.00 PM Friday GMT. There are certain exceptions – stocks and commodities included – so it’s worth checking with your chosen binary options broker during which hours trading is permitted.

Who Is Eligible To Trade? 

Eligibility to trade is determined by the age of the individual and the country in which they are based. Due to regulatory restrictions, licensed and regulated binary options brokers do not accept traders from the United States. However, unregulated binary options brokers may accept US traders. In addition, binary options traders across the board will only accept traders aged 18 years or over.

How Do I Open Binary Options Trading Account?
To open accounts, you will first need to select a reputable and reliable binary options broker, subsequently going through the account opening and activation processes. In some instances, you may be required to provide proof of identification, before your account will be fully activated. You will be given the opportunity to take advantages of a variety of special offers and choose from various membership types during the signup process. It is therefore of the utmost importance that you read all applicable terms and conditions carefully.

Can I Trade Without Depositing?
While the vast majority of leading binary options brokers allow new customers to sign up without depositing funds into their account, trading is not permitted prior to funds being transferred. The one exception to the rule being in instances where a free demo account facility is made available, though in many instances it is still necessary to deposit funds before gaining access to the demo account facilities.

How Much Can I Trade?
This all comes down to both the binary options broker you choose to work with and the type of trading you prefer. Nevertheless, quality binary options brokers may allow positions to be entered into from as little as $5, with limits going as high as $50,000 or even more. This is something else to take into account before signing up, in order to ensure that the broker you choose is suitable for your trading style and preferences.

What Can I Trade?
The specifics in terms of tradable assets available will always vary significantly from one broker to the next. Nevertheless, the asset library at any given broker will comprise a variety of stocks, commodities, Forex currency pairs and indices. In all instances, binary options trading remains essentially the same – i.e. choosing from two possible outcomes and winning or losing accordingly.

How Do I Make Money from Trading?


As already mentioned, with binary options it is as simple as choosing from one of two available options – specifically whether you think the value of any given asset will rise or fall over the allocated time period. This time period can be anything from 30-seconds right up to several months – something you as the trader get to decide. If at the end of the time period it proves that your prediction was correct, this is known as finishing in-the-money and you will earn a profit. If your prediction was incorrect, you will lose the amount you invested.

How Do I Withdraw My Money?
Withdrawal terms and conditions are to be studied in detail and taken very seriously, when considering which binary options brokers to work with. The reason being that along with how difficult or otherwise it is for you to get hold of your money, brokers may impose their own fees and commissions on withdrawals. In some instances, as high as $50 for bank wire transfers. Be sure to take into account the broker’s policies before agreeing to go ahead.

Do I Have to Download Software?
This is usually a matter of personal preference as the vast majority of binary options brokers offer primarily browser-based platforms. Where there is software available to download, it is usually strictly optional. There may be slightly different tools and features available from one to the next, but for the most part there is usually very little difference between the two.

How Much Can I Profit? 

This again is something that comes entirely down to your chosen broker. More often than not, a realistic maximum return from a reputable broker will be somewhere in the region of 80% or 85%. This would mean that if you invested $100 in a successful trade with a payout of 80%, you would get back your $100 plus $80 profit. You will often come across brokers who claim to offer payouts of more than 90% or even 95%, but such promises are rarely kept.

Do I Need Any Experience To Get Started?
One of the most appealing things about binary options is the way in which absolutely anyone can get started at any time with no prior experience or knowledge. Binary options represent a great entry-point for newcomers, though this doesn’t mean plenty of time, effort and commitment to education will not be necessary along the way. You don’t need any experience to get started, but you will definitely need to work hard to succeed.

Will I Need To Provide ID?
Generally speaking, most binary options brokers these days do not request proof of identification during the account opening process. However, most will require some form of identification before committing any withdrawals to be made. Accepted documents generally include passports, driving licences and any other forms of official government-issued ID. Recent utility bills detailing the required information may also be accepted.

Are Bonus Offers Legit?
While there are certainly plenty of solid promotions and deals available, it’s nonetheless worth looking at the vast majority of bonus offers with a certain amount of scepticism. The simple fact of the matter is that any bonus which appears to amount to free cash will in practice turn out to be nothing of the sort. It is of paramount importance to check all applicable terms and conditions before accepting any bonus offers whatsoever, in order to ensure that you do not sign up to something that leaves you out of pocket in the long-run.

What Is Copy Trading?
Always attractive to newcomers, copy trading is a facility that allows traders with any given platform to directly copy the actions of other traders. This can be extremely useful for those looking to monitor and mimic the actions of traders more experienced and more successful than themselves. An extension of copy trading is known as social trading, which is where the entire trading community comes together to trade and interact using a platform similar to a social network.

How Can I Choose a Quality Broker?
Last but not least, there is really no better way of ensuring you sign up with the very best broker available than by taking into account the thoughts, experiences and recommendations of other traders. Be sure to carry out sufficient research to paint an accurate picture of the service provider you are considering, before signing up with them. Compare traders’ experiences with independent expert reviews and you should be able to track down a quality broker with relative ease.


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