The binary options market has evolved greatly since its early beginnings. The market used to be an Over-the-Counter (OTC) instrument that was traded exclusively by high net-worth investors and financial institutions. This was until 2007 when the Securities and Exchange Commission approved proposals to open the market up to the public.
Since then, there has been a transformation in the depth of the market and in how the financial assets are traded. The binary options markets now incorporate trading in almost every financial instrument on the market today.
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We have the currency market, popularly called the forex market. Here traders can trade binary bets on the popularly traded currencies in the market. In the last one year, there have been some changes in the forex market, with three interventions in the Japanese Yen by the Bank of Japan. In addition, the Swiss National Bank (SNB) also fixed a minimum exchange rate for the Euro vs. the Confederacio Helvetica Franc (EURCHF) at 1.2000. With statements by both central banks to defend the integrity of the exchange rates of their currencies at all costs, binary bet market brokers have yanked off the Yen crosses and the currency pairs carrying the Swiss Franc from their forex market assets.
Virtually every kind of commodity such as corn, coffee, cocoa, soyabeans, natural gas, crude oil and cotton are traded as binary options. The binary bet markets featuring commodities is a fantastic way of playing the commodities market without being unnecessarily exposed to the high-risk and volatile nature of the commodities market. Ordinarily, commodity trading requires a large capital outlay, hefty margin requirements and is extremely volatile. Not many traders can play this market successfully. But the binary bets market provides a low-cost and low-risk way of trading commodities.
Though sometimes listed under commodities, I usually like to take spot metals differently as they have their own unique trading characteristics. Gold and silver are the popularly traded spot metals. Once again, the binary bet markets offers a low-risk and low-cost way of trading spot gold and silver.
Stock Index Futures
Stock index futures are a great way to play the stock markets. Many traders have lost a lot of money in stocks between 2008 and 2011. Rather than trade individual stocks, why not trade the stock index futures on the binary options markets? Virtually all the major stock indexes can be traded in the binary bets markets. This also offers traders a low-cost way of trading the index futures. Examples of index futures traded are the Dow Jones, Nasdaq, Xetra DAX, IBEX, FTSE100 and Nikkei 225.
Many people may not know it, but bonds can also be traded on the binary bets market. You can actually trade individual bonds on the market. One example is the German government bond, which is traded on one of the popular binary options brokerages. The yields of government bonds tend to rise when the economy of the parent country is in trouble, so the news could actually give a trader some hints as to how to play them on the binary bets markets.
Blue-chip stocks such as those of Verizon, Apple, Microsoft, Vodafone, Telefonica and British Petroleum (BP) are examples of individual stocks that can be traded as binary options.
The binary bet markets is indeed a huge opportunity that has presented itself for the taking. Perceptive traders can step out of the comfort zone of conventional investment vehicles to take advantage of what the binary bet markets has to offer. Innovations such as the development of the mobile trading platforms have also made it possible to trade binaries on the go. With the uncertainties pervading other markets, the binary bet markets look set to get increased relevance in the financial markets for some time to come.