Rebate Binary Options Explained and Reviewed

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Binary Options Rebates

There are many traits that separates the professional binary options trader from the new ones. One of the most important attributes present in a professional trader is the focus on reducing losses and trading costs to a minimum. The novice trader in contract prefers to blindly bid on call or put options while being out of touch. They usually just dream about the potential profits they could reap without giving much thought about the risks involved.

Professional traders do not only constantly seek opportunities to improve the ratios of their binary options trades whenever suitable opportunities arise. They also work hard in finding ways of reducing their trading expenses. A usual method that these traders employ to minimize their overall costs is for them to apply for rebates from dedicated websites that specialize in servicing this type of facility. By becoming a subscriber with such companies, binary options traders can then obtain refunds on a monthly basis equal to a portion of the total amount that they deposited to trade binary options during the preceding month.

Example of a Rebate

For example, imagine that a binary options trader performed binary options trading during June by wagering a total sum of $1,000. In addition, let us assume that the trader have registered with a company that is willing to supply him with a 4% rebate. With this rebate, regardless whether the trades are successful or not, the binary options trader would have still received a refund of $40 towards the end of July.

How Do They Work?

By now, you might be wondering how these companies manage to provide such benefits. Basically, these firms are prepared to pay the binary options trader a percentage of the profits that they receive from a broker if the trader agrees to join that particular broker using their affiliate link. In other words, these affiliate firms are prepared to offer refunds as a method to entice potential traders to become their affiliate with those binary options brokers that they promote on their websites. Such an arrangement can be very beneficial both for the trader and for the affiliate company. Specifically, these companies have a mechanism capable of increasing their number of affiliates while the trader can reduce his trading costs.

We have great deals with the top binary options brokers in the business. You should take a look into these great deals to get you started.

Importance of Rebates in Binary Options

Binary options trading was established to devise a simpler investment vehicle than other more traditional types, such as the stock markets and Forex. But even if binary options trading is a derivative of the marketplace, the trader must still acknowledge that losing is an inherent characteristic of the market. Consequently, the binary options trader must not be naïve to ignore this feature as a central component of the different trading strategies used. By aiming to minimize the impact of a loss and prioritizing reduced cost, a more intelligent binary options trader can improve his profit rates.

It should however be noted that this skill is quite difficult to master and can take some time to achieve. All the calculations of how much you are willing to spend for your trades, your profits and ratios all come into play when being in the trades. Because of this, taking advantage of rebates can help the binary options trader reduce overall costs whether the trades finish ‘’ or ‘’.

But as we always remind our readers, you should always adopt caution in trading. Learning the basics and mastering market sentiment and indicators is the best way to trade rather than making a shot in the dark every time. This is the only way to guarantee success in binary options. Rebates are just there to help you minimize your trading costs, but not necessarily there to make a profit.

Start looking at the best binary options brokers from our list and sign up today.

Binary Options Explained

Binary Options are options that only have two possible values upon expiration. Either the option will pay a predetermined value for being in the money, or will expire valueless in the same way traditional option contracts will. Predetermined payout values normally vary between 60%-85% but may be higher. Binary option times to expiration are typically much shorter than traditional options.

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  • BINOMO
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Binary option trading has recently become more popular amongst day traders. Binary options have also have received some bad press lately, mostly for brokerages opening accounts from clients who did not have any risk capital to trade with. Despite some unscrupulous brokerages making a bad name for them, binary options are a legal instrument, and can create extremely nice returns for successful traders.

Compared To Traditional Options

Binary options are not contracts traded over open secondary markets like traditional options. Binary options are a contract between you and the brokerage. The brokerage states a payout if the option expires in the money, at Tradorax usually 80% but the amount varies, and the option will expire worthless if it expires out of the money.

Usually the two options a trader has are to either buy a put or a call option, and the strike price is the exact price of the security at the time the trade is taken. Essentially a trader is simply betting on whether the security will be higher or lower than the current price at the time of expiration. It does not matter how far in the money a trade becomes, or if it is even only 1 cent in the money, the option payout price will be the same. Because of this it is obviously in a traders interest to take low volatility but highly probable trades.

Who Makes Money

A brokerage makes money over time because with a big enough sample size, they will win about 50% of the time and all traders combined will win about 50% of the time. Below is the payout tree to a trader with an 80% return for each winning trade, a typical payout.

Obviously for a binary options trading strategy to be effective for a trader, they must win on at least 56% of trades, given an 80% payout on winning trades. For this reason demo accounts are a necessity for new traders who need to work on developing a strategy. Choosing only the most probably trades are vital for binary option traders, since it does not matter how far in the money a trade becomes.

Short Time Frame

Binary option contracts have very short time to expiration most of the time. Some brokers offer time frames as low as 1 minute, and may offer as long as a couple weeks. Because the time to expiration is extremely short the vast majority of the time, binary options are very convenient for traders who do not have all day to watch trades. Trading can take place during a lunch hour, or whenever someone has a few minutes. The short time frame also makes it very enticing for traders to trade more often than they should, and traders must remember to maintain a disciplined approach.

Funding and Withdrawing

After the option expires a traders account is immediately credited with the payout amount or loss, and there are no restrictions on when a trader can withdraw money like traditional brokerage accounts. There are also no restrictions on funding accounts, and this means day traders must be cognizant of the amount of money they are putting at risk, as they must with any strategy.

To open your own binary options account, click below to use our preferred broker.

A Guide to Trading Binary Options in the U.S.

Binary options are financial options that come with one of two payoff options: a fixed amount or nothing at all. That’s why they’re called binary options—because there is no other settlement possible. The premise behind a binary option is a simple yes or no proposition: Will an underlying asset be above a certain price at a certain time?

Traders place trades based on whether they believe the answer is yes or no, making it one of the simplest financial assets to trade. This simplicity has resulted in broad appeal among traders and newcomers to the financial markets. As simple as it may seem, traders should fully understand how binary options work, what markets and time frames they can trade with binary options, advantages, and disadvantages of these products, and which companies are legally authorized to provide binary options to U.S. residents.

Binary options traded outside the U.S. are typically structured differently than binaries available on U.S. exchanges. When considering speculating or hedging, binary options are an alternative—but only if the trader fully understands the two potential outcomes of these exotic options.

Now that you know some of the basics, read on to find out more about binary options, how they operate, and how you can trade them in the United States.

U.S. Binary Options Explained

Binary options provide a way to trade markets with capped risk and capped profit potential, based on a yes or no proposition.

Let’s take the following question as an example: Will the price of gold be above $1,250 at 1:30 p.m. today?

If you believe it will be, you buy the binary option. If you think gold will be below $1,250 at 1:30 p.m., then you sell this binary option. The price of a binary option is always between $0 and $100, and just like other financial markets, there is a bid and ask price.

The above binary may be trading at $42.50 (bid) and $44.50 (offer) at 1 p.m. If you buy the binary option right then, you will pay $44.50. If you decide to sell right then, you’ll sell at $42.50.

Let’s assume you decide to buy at $44.50. If at 1:30 p.m. the price of gold is above $1,250, your option expires and it becomes worth $100. You make a profit of $100—$44.50 = $55.50 (minus fees). This is called being in the money. But if the price of gold is below $1,250 at 1:30 p.m., the option expires at $0. Therefore you lose the $44.50 invested. This called out of the money.

The bid and offer fluctuate until the option expires. You can close your position at any time before expiry to lock in a profit or a reduce a loss, compared to letting it expire out of the money.

A Zero-Sum Game

Eventually, every option settles at $100 or $0—$100 if the binary option proposition is true and $0 if it turns out to be false. Thus, each binary option has a total value potential of $100, and it is a zero-sum game—what you make, someone else loses, and what you lose, someone else makes.

Each trader must put up the capital for their side of the trade. In the examples above, you purchased an option at $44.50, and someone sold you that option. Your maximum risk is $44.50 if the option settles at $0, and so the trade costs you $44.50. The person who sold to you has a maximum risk of $55.50 if the option settles at $100—$100 – $44.50 = $55.50.

A trader may purchase multiple contracts if desired. Here’s another example:

  • NASDAQ US Tech 100 index > $3,784 (11 a.m.).

The current bid and offer are $74.00 and $80.00, respectively. If you think the index will be above $3,784 at 11 a.m., you buy the binary option at $80, or place a bid at a lower price and hope someone sells to you at that price. If you think the index will be below $3,784 at that time, you sell at $74.00, or place an offer above that price and hope someone buys it from you.

You decide to sell at $74.00, believing the index is going to fall below $3,784 (called the strike price) by 11 a.m. And if you really like the trade, you can sell (or buy) multiple contracts.

Figure 1 shows a trade to sell five contracts (size) at $74.00. The Nadex platform automatically calculates your maximum loss and gain when you create an order, called a ticket.

Nadex Trade Ticket with Max Profit and Max Loss (Figure 1)

Forex Rebates Explanation

Many traders are looking for forex rebates. Read this article to find out what are forex trading rebates and how to benefit from them.

What are forex trading rebates?

Forex Rebates have always been a way of brokers to compensate the traders their spread and commission expenses. In other words, it is a simple commission sharing scheme between your broker and yourself. When trading 1 lot on EUR/USD with the spread of 3 pips, you end up paying a sum of 30 USD to the broker. While many brokers keep the funds to themselves, there are some brokers that give a share of this commission back to you as a part of loyalty program or a forex rebates bonus promotion.

Stay away from fake forex rebates!

There are some brokers that would tell you that they offer rebates, while in real life they just increase the spread on your account and pay you back the difference. It is common to encounter the brokers that have rebate accounts, where the spread is 2 pips higher than on a regular account. Such rebates don’t do anything good to you. Browse Forex Bonus Lab Rebates to find the best matching offer.

There are also many webpages that offer you a certain amount of money for trading with a certain broker. Usually such pages just share with you a part of their commission, and of course their commission depends on the broker’s spread. We suggest you to stay away from such sites too, as these people will offer you to trade not with the best broker, but with the broker that pays the largest commission.

How to get the best forex rebates offer?

This generally depends on your brokerage house. You may shoot an email to your account manager asking them if they offer any or you could let us do the job. Simply click here to contact us and we will get in touch in minutes. If you already have an account with the broker, we will get the best fx rebate deal for you. If you don’t have an account with one, we will suggest you a list of the best brokers. We disregard the affiliate payments when it comes to advising a proper.

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Best Binary Options Brokers 2020:
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