Talk:Binary option

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The UK is in the process of moving the regulation of binary options to the Financial Conduct Authorityrather than as gambling. This is to close a loophole. Some other EU countries regulate binary options via their financial authorities, and once allowed in the EU, binary option brokers can operate anywhere in the EU.

This allows regulator shopping, where a binary option broker can find a friendly regulator country and then operate EU-wide. See Banc de Binary and these articles on binary options scams. This has not yet taken effect. The binares trading wiki rules are supposed to be published on 3 Januaryto take effect on 3 January The binary options article probably should be updated early inwhen the new rules are binares trading wiki.

John Nagle talk There have been many edits from addresses from Wind. Someone seems to be trying to get a message across, but failing because of language problems.

Can you tell us what you are trying to do? Someone has been removing the equations on grounds of "overkill". It makes absolutely no sense. This is an encyclopedia and we send students and trainees to get formulae from Wiki. When you google the page that's what you get.

The formulas need to be reinstated. I will revert unless there is a specific spot where these formulas are found. Maybe we should take a stronger line in the lede. We should distinguish between real options, where there's someone on the other side of the trade other than the broker, and bucket-shop operations, where the other party is the broker, acting as the "house" in a gambling transaction. The US doesn't allow those.

See Banc de Binary. A binary option has a mathematical importance as the density of the risk neutral distribution. So the lede should distinguish between its theoretical and gambling roles. I teach students binary options and link to this page and want to make sure they do not get confused with this gambling and shady aspect of the binaries.

The binary options industry has a trade convention. There was also a note that SpotOption the binary option platform invented binary options, but the cited source was anonymous.

Undid a big revision to the math which was cited to a student site at the University of Waterloo. The anon IP resolves to the University of Waterloo. The Black-Scholes model math needs work. Currently, the article claims that a common binary option which pays out if the underlying asset is higher at the end of the option period should be valued at. But most binary options are valid for less than a day, some only for minutes. So the formula simplifies to.

Unless the option can be exercised at any time as binares trading wiki "American-type options"it's just a bet against a random walk. For a short period, the Black-Scholes analysis isn't useful. All that math kind of hides that basic fact. Someone proposed a merge, but didn't start the discussion. Does anyone want to make a case for a merge with index trading?

Merging index trading into Stock market index option might be more useful. I'm doing some editing to try to make the article less jargon-y and more understandable to a broader audience.

However, my technical knowledge in this field is not great and I encourage subject matter experts to determine if I've made anything wrong by accident. Again, would appreciate it if subject-matter experts would review my edits. I had several objectives: We talk about the binares trading wiki action against binary options before describing, clearly, just what binares trading wiki are and where they are traded.

The Cyprus Securities and Exchange Commission, as part of their belated crackdown on the binary option industry, has issued a list of domains they know about which are doing binary options business but are not regulated by them. Binares trading wiki De Binary is on the Quebec list, and that's already covered. We have joined together, all the enforcement agencies, to combat this ugly phenomenon.

We have declared an all-out war against binary options. We hear dreadful testimonies and stories about people being persuaded to enter this arena. I make it clear all the time that see these operations as forbidden and akin to extortion and exploitation of the public by greedy charlatans, that phone them up and take their money.

We are doing everything that we can today to stop this. New blacklists binares trading wiki binary options brokers from France's financial regulator [42]Swiss financial regulator [43]and Italy's financial regulator [44]. New statement from Singapore police. One binary option operator has renamed binary options " Digital s ".

Another name is " Binarex ". I request to add under "further reading" the following: A little off topic on this page, please forgive me, but a new article at IQ Option could use a once over by people familiar with this topic area. Wikipedia already has a bit of a history with IQ Option - their website is on our spam blacklist.

SmartseNaglebinares trading wiki Brianhe: For example, for some reason I am hesitant to name the FBI agent who was quoted, even though it's right there in the Times of Israel. It just seems that the important thing is his position within the FBI, not his binares trading wiki.

But whatever people think best. Another example is whether to include the FBI's complaint website address.

Thanks in binares trading wiki for any help. The bill to ban the binary option industry in Israel has reached hearings in the Knesset. There are 20, people employed in binary options in Israel, and 60, people indirectly. You see the building boom right now in Tel Aviv?

Well, you can just say goodbye to that because most skyscrapers in Tel Aviv binares trading wiki be empty. There will be no one to fill them binares trading wiki. The main argument for shutting down the industry was "Because this industry gives Israel such a bad name and inflames anti-Semitism, we must uproot the phenomenon.

Any contributor to this article or this talk page who is paid to contribute needs to declare their paid status according to our Terms of Use. COI would be useful as well. Unfortunately pages related to binary options have had lots of paid editing both declared and undeclared and lots of disruption has resulted from that.

I've been bold binares trading wiki removing a post here that seems to have been advertising See WP: NOADS or paid editing for a publication that seems to promote binary options trading from certain firms. If anybody objects to my boldness, you can certainly add back the section using the the history page.

Note that I do not blame the editor, he may have been acting in good faith without knowing our sometimes complicated rules. But I do think it is up to us to actively let people know what our rules are, and when they seem to binares trading wiki violating our rules. Times of Israel gives a name, but it's not a name I'd recognize. Others have said this binares trading wiki from an undercover operation by Israeli police. So it seems this might be more than a simple single arrest.

We can probably put the owner's name up as soon as another source confirms it. However there may be a similar problem to binaries in the sense that they can be used by bucket shops. The Times of Israel has done an investigative series binares trading wiki binary options, and has mentioned this very article in so doing.

I think this needs to be incorporated in this article. I think it deserves a brief mention. Sometimes editors go overboard in such situations, but let's not. Please see Israeli ministers approve bill to outlaw entire binares trading wiki options industry. Not that it's a done deal. The law could take over 6 weeks to pass, as I see it, even if everything goes smoothly. I can't see how binary options are any different than traditional trading in this regard.

Anyone can open a brokerage account and start trading without knowing what moves whatever they're binares trading wiki. It's not like brokerages require their clients to take a test before they can start trading. From Wikipedia, the free encyclopedia. Retrieved from " https: Articles prone to spam from January Wikipedia pages binares trading wiki copied template Wikipedia pages using copied template without oldid.

Views Read Edit New section View history. This page was last edited on binares trading wiki Decemberat By using this site, you agree to the Terms of Use and Privacy Policy.

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Day trading is speculation in securities , specifically buying and selling financial instruments within the same trading day. Strictly, day trading is trading only within a day, such that all positions are closed before the market closes for the trading day. Many traders may not be so strict or may have day trading as one component of an overall strategy. Traders who participate in day trading are called day traders.

Traders who trade in this capacity with the motive of profit are therefore speculators. The methods of quick trading contrast with the long-term trades underlying buy and hold and value investing strategies.

Some of the more commonly day-traded financial instruments are stocks , options , currencies , and a host of futures contracts such as equity index futures, interest rate futures, currency futures and commodity futures. Day trading was once an activity that was exclusive to financial firms and professional speculators. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management.

However, with the advent of electronic trading and margin trading , day trading is available to private individuals. Some day traders use an intra-day technique known as scalping that usually has the trader holding a position for a few minutes or even seconds.

Most day traders exit positions before the market closes to avoid unmanageable risks—negative price gaps between one day's close and the next day's price at the open. Another reason is to maximize day trading buying power. Day traders sometimes borrow money to trade. This is called margin trading. Since margin interests are typically only charged on overnight balances, the trader may pay no fees for the margin benefit, though still running the risk of a margin call.

The margin interest rate is usually based on the broker's call. Because of the nature of financial leverage and the rapid returns that are possible, day trading results can range from extremely profitable to extremely unprofitable, and high-risk profile traders can generate either huge percentage returns or huge percentage losses. Because of the high profits and losses that day trading makes possible, these traders are sometimes portrayed as " bandits " or " gamblers " by other investors.

The common use of buying on margin using borrowed funds amplifies gains and losses, such that substantial losses or gains can occur in a very short period of time.

In addition, brokers usually allow bigger margins for day traders. Because of the high risk of margin use, and of other day trading practices, a day trader will often have to exit a losing position very quickly, in order to prevent a greater, unacceptable loss, or even a disastrous loss, much larger than his or her original investment, or even larger than his or her total assets. Originally, the most important U. A trader would contact a stockbroker, who would relay the order to a specialist on the floor of the NYSE.

These specialists would each make markets in only a handful of stocks. The specialist would match the purchaser with another broker's seller; write up physical tickets that, once processed, would effectively transfer the stock; and relay the information back to both brokers.

One of the first steps to make day trading of shares potentially profitable was the change in the commission scheme.

In , the United States Securities and Exchange Commission SEC made fixed commission rates illegal, giving rise to discount brokers offering much reduced commission rates. Financial settlement periods used to be much longer: Before the early s at the London Stock Exchange , for example, stock could be paid for up to 10 working days after it was bought, allowing traders to buy or sell shares at the beginning of a settlement period only to sell or buy them before the end of the period hoping for a rise in price.

This activity was identical to modern day trading, but for the longer duration of the settlement period. But today, to reduce market risk, the settlement period is typically two working days.

Reducing the settlement period reduces the likelihood of default , but was impossible before the advent of electronic ownership transfer. The systems by which stocks are traded have also evolved, the second half of the twentieth century having seen the advent of electronic communication networks ECNs.

These are essentially large proprietary computer networks on which brokers could list a certain amount of securities to sell at a certain price the asking price or "ask" or offer to buy a certain amount of securities at a certain price the "bid". The first of these was Instinet or "inet" , which was founded in as a way for major institutions to bypass the increasingly cumbersome and expensive NYSE, also allowing them to trade during hours when the exchanges were closed.

Early ECNs such as Instinet were very unfriendly to small investors, because they tended to give large institutions better prices than were available to the public.

This resulted in a fragmented and sometimes illiquid market. The next important step in facilitating day trading was the founding in of NASDAQ —a virtual stock exchange on which orders were transmitted electronically.

Moving from paper share certificates and written share registers to "dematerialized" shares, computerized trading and registration required not only extensive changes to legislation but also the development of the necessary technology: These developments heralded the appearance of " market makers ": A market maker has an inventory of stocks to buy and sell, and simultaneously offers to buy and sell the same stock.

Obviously, it will offer to sell stock at a higher price than the price at which it offers to buy. This difference is known as the "spread". The market maker is indifferent as to whether the stock goes up or down, it simply tries to constantly buy for less than it sells.

A persistent trend in one direction will result in a loss for the market maker, but the strategy is overall positive otherwise they would exit the business. Today there are about firms who participate as market makers on ECNs, each generally making a market in four to forty different stocks. Another reform made was the " Small Order Execution System ", or "SOES", which required market makers to buy or sell, immediately, small orders up to shares at the market maker's listed bid or ask.

In the late s, existing ECNs began to offer their services to small investors. New brokerage firms which specialized in serving online traders who wanted to trade on the ECNs emerged. Archipelago eventually became a stock exchange and in was purchased by the NYSE. Moreover, the trader was able in to buy the stock almost instantly and got it at a cheaper price. ECNs are in constant flux. New ones are formed, while existing ones are bought or merged. As of the end of , the most important ECNs to the individual trader were:.

This combination of factors has made day trading in stocks and stock derivatives such as ETFs possible. The low commission rates allow an individual or small firm to make a large number of trades during a single day.

The liquidity and small spreads provided by ECNs allow an individual to make near-instantaneous trades and to get favorable pricing. The ability for individuals to day trade coincided with the extreme bull market in technological issues from to early , known as the Dot-com bubble. In March, , this bubble burst, and a large number of less-experienced day traders began to lose money as fast, or faster, than they had made during the buying frenzy.

The NASDAQ crashed from back to ; many of the less-experienced traders went broke, although obviously it was possible to have made a fortune during that time by shorting or playing on volatility. In parallel to stock trading, starting at the end of the s, a number of new Market Maker firms provided foreign exchange and derivative day trading through new electronic trading platforms. These allowed day traders to have instant access to decentralised markets such as forex and global markets through derivatives such as contracts for difference.

Most of these firms were based in the UK and later in less restrictive jurisdictions, this was in part due to the regulations in the US prohibiting this type of over-the-counter trading. These firms typically provide trading on margin allowing day traders to take large position with relatively small capital, but with the associated increase in risk. Retail forex trading became a popular way to day trade due to its liquidity and the hour nature of the market.

The following are several basic strategies by which day traders attempt to make profits. Besides these, some day traders also use contrarian reverse strategies more commonly seen in algorithmic trading to trade specifically against irrational behavior from day traders using these approaches.

It is important for a trader to remain flexible and adjust their techniques to match changing market conditions. Some of these approaches require shorting stocks instead of buying them: There are several technical problems with short sales—the broker may not have shares to lend in a specific issue, the broker can call for the return of its shares at any time, and some restrictions are imposed in America by the U.

Securities and Exchange Commission on short-selling see uptick rule for details. Some of these restrictions in particular the uptick rule don't apply to trades of stocks that are actually shares of an exchange-traded fund ETF. Trend following , a strategy used in all trading time-frames, assumes that financial instruments which have been rising steadily will continue to rise, and vice versa with falling.

The trend follower buys an instrument which has been rising, or short sells a falling one, in the expectation that the trend will continue. Contrarian investing is a market timing strategy used in all trading time-frames. It assumes that financial instruments which have been rising steadily will reverse and start to fall, and vice versa.

The contrarian trader buys an instrument which has been falling, or short-sells a rising one, in the expectation that the trend will change. Range trading, or range-bound trading, is a trading style in which stocks are watched that have either been rising off a support price or falling off a resistance price.

That is, every time the stock hits a high, it falls back to the low, and vice versa. Such a stock is said to be "trading in a range", which is the opposite of trending. A related approach to range trading is looking for moves outside of an established range, called a breakout price moves up or a breakdown price moves down , and assume that once the range has been broken prices will continue in that direction for some time.

Scalping was originally referred to as spread trading. Scalping is a trading style where small price gaps created by the bid-ask spread are exploited by the speculator.

It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. Scalping highly liquid instruments for off-the-floor day traders involves taking quick profits while minimizing risk loss exposure.

The basic idea of scalping is to exploit the inefficiency of the market when volatility increases and the trading range expands. When stock values suddenly rise, they short sell securities that seem overvalued. Rebate trading is an equity trading style that uses ECN rebates as a primary source of profit and revenue. Most ECNs charge commissions to customers who want to have their orders filled immediately at the best prices available, but the ECNs pay commissions to buyers or sellers who "add liquidity" by placing limit orders that create "market-making" in a security.

Rebate traders seek to make money from these rebates and will usually maximize their returns by trading low priced, high volume stocks. This enables them to trade more shares and contribute more liquidity with a set amount of capital, while limiting the risk that they will not be able to exit a position in the stock. The basic strategy of news playing is to buy a stock which has just announced good news, or short sell on bad news. Such events provide enormous volatility in a stock and therefore the greatest chance for quick profits or losses.

Determining whether news is "good" or "bad" must be determined by the price action of the stock, because the market reaction may not match the tone of the news itself. This is because rumors or estimates of the event like those issued by market and industry analysts will already have been circulated before the official release, causing prices to move in anticipation.

The price movement caused by the official news will therefore be determined by how good the news is relative to the market's expectations, not how good it is in absolute terms. Keeping things simple can also be an effective methodology when it comes to trading. These traders rely on a combination of price movement, chart patterns, volume, and other raw market data to gauge whether or not they should take a trade.