Binary options trading is becoming more and more popular in Australia – and for a good reason. This instrument is flexible, easy to manage, and offers a well-defined risk and clear outcomes on every trade.
There are different rules and regulations applied to online trading and speculating, which work to make your experience safe and secure. So, it’s important to check out local requirements before placing your first bet.
Binary options aren’t as complicated as you might think. As soon as you become familiar with the basics and figure out the rules, you can be on your way to making good profits.
What Are Binary Options?
A binary option is a financial product built around the commodities market. Like all option contracts, it gives you the right to buy or sell virtually any underlying asset on specific terms. Possible assets include stocks, cryptocurrencies, gold, bonds, and other assets that are readily valued.
This instrument is based on the simple concept of asking a yes/no question. It starts with the following query – will the market price for this asset be higher or lower at a certain time? This gives rise to two situations:
- If a trader assumes it will be higher (or at least at the same market price), they should buy a binary option.
- If they think the price is going to drop, they should sell the option.
Based on how the trade plays out, you will either get a fixed payoff amount in profits or nothing at all.
How to Trade Binary Options in Australia
With the common high-low binary option, traders don’t need a lot of trading knowledge or experience to start. A high-low binary option refers to a simple fixed-return technique which is viable for many trading assets. All you need to do is take a few steps, which are outlined below.
Here are the guidelines to start trading in a few minutes.
- Choose a broker – This is the most critical part of your trading journey, which can affect all of your future results. Research: broker reviews and comparison tools will help you find the most reliable, generous broker.
- Open a demo account or register straightaway – Depending on the platform you chose, you may be asked to place a deposit to start trading.
- Choose an asset – Since your profits depend on the performance of the underlying asset, this is a very important decision to make. How its price changes determine whether you win or lose.
- Find a strike price – This is the price at which a contract can be bought or sold. Pick the one that works for you and decide whether the market price will be above or below it at expiration.
- Open the trade – This is made up of a number of parameters: the type of asset, price, and expiration day and time. Place a trade and wait for the outcome.
The biggest perk of working with a binary trade is that you have a decent level of certainty. You know the maximum amount of money you might lose, so your risk is minimised. For example, if you buy a contract for $25 with $100 being your end goal, you are aiming to profit $75. If the market doesn’t move how you expected, you won’t lose any more than that initial $25.
Compare Top-Rated Australian Brokers
As we’ve mentioned, the first step to making your way into the binary options trade is choosing a broker. This task is both simple and daunting, and we recommend that you spend some time assessing the pros and cons of all your potential choices.
The Australian binary options market is fairly new. But there are already several leading options brokers that are worth looking into:
- HighLow is a licensed, reliable broker based in Sydney, Australia. This service is known to provide favourable payouts and require no deposit for the demo account. These conditions make it a great place to gain trading experience for beginners. For more information, check out our HighLow guide.
- IQ Option is a Cyprus-based online trading platform that is regulated in the EU. There is no limit on how long you can use the demo account so you can truly refine your trading techniques. You’ll have $10,000 in virtual funds, and then you can upgrade to a real one with equally as friendly terms.
- Opteck was developed by a UK-based company with branches across the world. It is a web-based service, and there’s no need to download any software or app. Users can trade with a wide variety of binary options assets and study educational tools and materials along the way.
- EasyMarkets is another Cyprus-based market maker licensed in Europe and Australia. They offer over 200 trading instruments and, overall, create a friendly, safe, and trusting trading environment.
- Binarycent is an offshore company that is globally accessible to many traders. There are three levels of paid accounts, depending on which terms you prefer. The trading tools are straightforward but, just in case, there are educational materials included on the platform.
How to Choose a Binary Options Broker
A good broker platform is a starting point, and we’ll walk you through several criteria to find the best binary options brokers in Australia:
- License and regulation – To obtain a broker licence, the service must be verified based on their documentation, law compliance, use of payments systems, and a lot more. This should give you a general idea of whether they will process your funds fairly.
- Deposit/withdrawal methods – You want your broker to accept your preferred payment method for convenience. Also, if they are supported by major online merchants, it adds to their credibility.
- Trading resources – What kind of functionality do they offer? Check the offered trade tools, quotes, news feeds, analysis, and educational materials about binary options.
- Demo accounts – Before committing to a paid account, the broker should give you the option to explore the service for free.
- Return and bonuses – On top of your actual earnings, you can also receive great monetary incentives. The conditions vary from broker to broker.
- Mobile trading – Being able to check your account using a smartphone or tablet is also a great perk. In fast-moving markets, you may want to access your trades on the go.
- Customer support – The ability to communicate with your broker is crucial. See which communication methods they offer and whether they respond in a timely manner. If you have any issues down the line, you will need effective assistance.
The Importance of Australian Licensing
The number of binary options brokers in Australia is growing, and the general public needs a way to verify their trustworthiness. This is where regulations and industry compliance policies come into play.
The most important regulatory body that you should pay attention to is an Australian Securities & Investments Commission (ASIC) binary options license. Referring to ASIC licensing is the best way to make sure your funds are secure.
Some online trading platforms are regulated directly in Australia. At the same time, there are many companies that are based in Europe that still accept Australian traders. Not to mention, they are flexible about different local payment methods. The ASIC’s job is to ensure that these platforms offer traders and investors sufficient protection.
Legal Australian Binary Options
Brokers are allowed to place fees and commissions on a transaction. This condition is another important factor when choosing a platform to trade with. The majority of brokers don’t have registration fees, but there are other small costs that you need to keep in mind:
- Fees that are charged once the transaction has successfully completed;
- Fixed fees by the payment processor;
- Currency conversion differences;
- Withdrawals requirements.
Unfortunately, some traders have become victims of questionable and unlicensed online brokers. We use our experience and knowledge to help you avoid putting yourself in this position. Don’t be enticed by promises for guaranteed wins and educate yourself first to understand every possible outcome.
An interesting way to enter the market is by using a binary options robot. There are many stories about successful trades with automated systems, so you can also look into this avenue.If you follow our recommendations, you will understand why so many people are engaged in the binary options trade. This is a hassle-free way to earn profits and even receive bonuses and other great extras. Trade binary options in Australia and you can become another example of success in the binary options trading community.