Debunking The Binary Options Myths

In a famous article by Forbes magazine a couple of years ago.

Gordon Pape equates binary options to gambling.

There are lots of ways to lose your money in this world but here’s one I hadn’t encountered before: binary option Web sites. They have become popular over the past few years with new ones appearing all the time:,,,, etc. etc.

The sites appeal to the same type of people who play poker online. But they somehow have an aura of being more respectable because they represent themselves as offering a form of investing. Don’t kid yourself. These are gambling sites, pure and simple. It’s probably just a matter of time before regulators move in on them.

Fast forward to July 2013 and the online binary options world is a whole new story.

There are over 140 different online binary option brokers!

Banc de Binary is the leader in Binary Option trading. Having received regulatory approval from the FSA and no longer accepting American traders as they await accreditation and regulatory over site from the CFTC. TopOption is also in the same league, regulated by the FSA in the UK and not accepting American traders. The one who is currently dragging their feet is the CFTC. They like most financial regulators take years to work out how to regulate a new financial product and typically wait until it is so wide spread that they begin regulations long after they should start.

Currently the only binary options brokers that are still accepting American traders are Cedar Finance, and Opteck. These brokers are not regulated neither in the United States nor the United Kingdom, however they still manage to get a fair number of traders who are willing to trade with them even without regulatory over sight.

The big problem that financial journalists have with binary options is the fact that they are created for day traders or financial gambling. Since the stock market crash of 1999 when day-trading was at its peak, America has never really recovered from the concept of making money moving in and out of a stock position in less than a day. The main stream financial media still considers it risky to buy a stock for less than 1 year. They are still selling the myth that in order to make money you must follow the “buy& hold” investing theory which anyone who has need the stock market from 1999 through 2013 will notice a bunch of peaks and valleys with no real gain. Interestingly, the only people that are actually making money on wall street are the prop desks at investment firms like Goldman Sachs and UBS. If you ask Wall Street traders how long they typically hold a position for they will tell you, anywhere from a hour to a couple of weeks.

With the growing popularity of weekly options, we will see binary options continue to gain popularity and when we look back in five years time, we will see that this is correct.