BINARY OPTIONS IN SOUTH AFRICA
Financial markets worldwide can be of many types, facilitating traders around the world to conduct trades with investment options of their choice. The popular trading options include Stock trading, trading in CFDs, indices, foreign currencies and even cryptocurrencies. However, the term “Binary Options” is a relative newcomer in these fields and differs slightly from the other investment options listed above.
In simple terms, Binary Options is considered to be an “asset or nothing” option, where the payoff is structured as either a fixed amount of compensation, or nothing at all. The success of a Binary Options trade is thus entirely dependent on a yes or no proposition. Traders can receive a fixed amount of compensation if the option is “in the money” or absolutely nothing if the option chosen expires “out of the money”. One major point of difference in Binary Options trading is that a trader does not have the choice to buy or sell the underlying asset on which the option is based.
Best Binary Options Broker in South Africa
| *Your capital is at risk |
| Broker | Website | Regulation | Min. Deposit | Min Investment | Max Return | Demo |
|---|---|---|---|---|---|---|
 |
Visit Broker* IQ Option Review |
 |
$ 10 |
$ 1 |
95% | Yes |
 |
Visit Broker1 Spectre.ai Review |
Costa Media Interactive SRL |
$ 0 |
$ 1 |
83% |
Yes |
 |
Visit Broker* Binary Review |
MGA and others |
$ 5 | $ 5 | 100% | Yes |
 |
Visit Broker* Binomo Review |
CROFR |
$ 10 |
$ 1 |
85% | Yes |
Popularity of Binary Options in South Africa
The emergence of Binary Options trading in South Africa can be traced back to the early months of 2008, where the industry emerged on the financial market. Because, Binary Options are a relatively new concept, many South African traders preferred it over other trading options. The introduction of online Binary Options by brokers further expanded its reach, as more and more traders started to join after being attracted to the profitability. The Binary Options industry has a myriad of trading instruments which enable traders to walk away with a higher degree of pay-outs.
How to go about trading Binary Options?
The South African Market landscape for Binary Options is definitely enticing for traders because of the simplicity and the range of options it offers. Another major factor is the convenience and accessibility, with the introduction of online Binary Options further expanded its reach. However, to become successful, one has to understand the core concept of Binary Options. This includes a mix of certain trading terminology, a specific skill set and a vast knowledge of the Binary Options market. The following points aim to form a guide on how to trade in Binary Options for the first time.
Choosing a broker: The first step involves choosing an appropriate broker who offers Binary Options trading. It is generally advised to choose more than one broker to minimise any risk that may arise later on. A Binary Options broker which properly fulfils the traders’ preferences as well as certain other criteria will be discussed later.
Setting up an Account: After conducting thorough research and choosing the right broker, the next step involves registering an account. Most trading platforms offer streamlined account set up procedures which do not take much time. A trader has to submit legitimate personal information, including proper birthdates and other financial papers. There is also an option of using a demo account before a trader gets started with the process.
Choosing a trading type: There are various trading types to choose from including High or Low, Touch, 60 Seconds, Boundary, option builder, etc. depending on the broker chosen. Of this, the High and low option is provided by almost all brokers, and is very popular in the trading community. Choosing this option involves predicting the price level of an underlying asset, whether it will be higher or lower than the current price level.
Selecting an Asset: Depending on the broker chosen, traders have a choice of selecting from stocks, commodities, Forex or indices. A trader should select according to his/her own confidence level as well as preference.
Making a prediction: Once a particular asset has been chosen, a percentage figure appears corresponding to it which indicates the amount of money a trader will win if the prediction is correct. To choose a prediction, a trader then has to enter an amount that he/she intends to invest.
Selecting an Expiry time: The final step involves selecting an expiry time and wait for it to end. If the prediction is correct then the trader receives the aforementioned winning percentage as a reward. Similarly, if the trader’s prediction is incorrect, he/she will lose the original amount invested.
*The above guide is just a simple example using the High or Low option. There are other more complicated options to choose from.
How to choose the right Binary Options broker?
Choosing the right Binary Options broker is critical, especially in an emerging market such as South Africa’s. The outcome of a trade depends heavily on the services offered by the broker chosen and so careful research must be done before making any sort of decision. Below are certain factors traders can consider when they make the final decision.
Financial Assets offered: Tradable assets offered by Binary Options brokers can differ heavily from one another. Generally a good Binary Options broker should provide traders with options in Commodities (cotton, gold, and wheat), Indices (FTSE-100, DOW Jones), national currencies and general stocks. According to his/her preferences, a trader can make a decision based on an “Asset Index” which provides asset information in detail.
Expiry: Expiry times are crucial in Binary Options as they can be the difference between making a fortune and losing it all. Majority of brokers offer the regular 15 minutes, 30 minutes and one hour. Some brokers have even started introducing 24 hours trading as well as 60 seconds trading. A trader should make this choice after judging his/her own skill and experience levels.
Returns: Binary Options are generally more profitable compared to other options. But this depends greatly on the degree of pay-outs or returns that a broker offers. Generally, most brokers offer returns that range from 60% to about 80%. It should be noted, that a higher return should not be the only consideration, as the outcome of a trade depends on a variety of other factors.
Tools offered: Binary Options like most other forms of trading involve making decisions after careful analysis of the market. Various specialised in-depth tools are therefore required to conduct proper technical analysis. Thus the broker chosen should offer a comprehensive list of tools, such as live stocks, commodities, indices as well as currency data information.
Demo Account: Many online Binary Options brokers offer the first time user’s the chance to open a demo account. A demo account can be a valuable resource for a novice trader, especially since the risk is minimised by using virtual money instead or real currency. Thus, the trader can take a “trial and error” approach and cultivate his/her trading skills before jumping into the live market.
Customer Support: Customer support is a necessary facet in almost all industries and Binary Options trading are no different. A good broker should have a number of options for users to contact them, including live chat, phone, Skype, call back and emailing options. They should also have a knowledgeable and responsive staff that can resolve any issue within the first time of asking.
Account Security: Due to the more recent threat of cyber security and the frequency of data breaches, a broker should always have the proper security protocols in place for protecting investor funds. These include setting up appropriate measures such as data encryption and two factor authentications to provide the maximum security possible.
Regulatory Bodies: Last but not the least, a broker should be registered and licensed by a recognised regulatory body within the region they are operating in. For example, the FSB and FAIS are responsible for regulating such activities in South Africa.
Conclusion:
Binary Options trading is certainly an exciting and relatively new way of earning a profit in the South African trading markets. However, traders must recognise the risks associated with options trading, and thus should be equipped with a definite skill set and technical knowledge. They should also choose the right broker to ensure that they have a seamless trading experience.
