Why Bitcoin Trading is the Next Big Thing in Binary Options

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Binary Options Trading in Asia

Binary Options Trading in Asia: There is no doubt that the popularity of binary options trading is fast increasing the world over. There is also no doubt that Asia is the fastest growing continent in the world. Thus, it was only a matter of time before binary options found its footing in Asia. Gone are the days when binary options were only the purview of the Americans and the Europeans, other continents including Africa and Asia are warming up to the financial phenomenon, for lack of a simpler word. The eyes of the world, and those of binary options brokers, are now paying more attention to the Asian powerhouse which includes China, Japan, India, Malaysia, Singapore and Indonesia.

What are Binary Options?

The term binary refers to something that has two parts. Binary options therefore can be defined as a financial trading instrument that comprises of several ‘options’ each with two choices or possible outcomes. Basically, in binary options, one forecasts/predicts whether the price of an asset will rise or fall within a certain time frame and puts up an amount of money to that effect. Now, that’s one instance of binary (double) options. The value of the asset can either go up or down, there’s no other ways for the asset to go. In most cases, the extent of the rise or fall doesn’t matter, only the direction of the movement.

binary options trading in asia is highly popular

Another dimension of the two-option nature of binary options is the win or loss scenario. Here, one either wins the full payout, usually predetermined, or loses all their investment. You cannot win partial payouts or lose only a certain part of your investment. For example, if you had predicted that within one hour, the value of Samsung’s stocks will be higher than $101.5 and ‘bought’ a high option worth $100 with 85% potential payouts, and it comes to pass; you will receive your original investment back plus an additional payout of $85. If it doesn’t come to pass and the value of the stock is actually less than $101.5, you will lose the whole amount you had put up. The third scenario where the value remains constant can be regarded as a spoilt trade and the trader gains nothing and loses nothing.

As the above example shows, you cannot lose more than you have put up and you will always know the pay out for a win. There are no commissions in binary options, unlike in forex and stock trading where the brokers usually charge a commission of a certain percentage of the realized profits.

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  • 1. Your Binary Option Robot will analyse the market and decide, which asset (currencies, indices, commodities and stocks), is right to trade at that point in time.

    2. The Binary Option Robot Will Predict the Price Movement

    Your robot will assess a wide-range of factors, and then make a prediction on how the assets price will move, saying: Call (up) if it believes the price will rise and Put (down), if it believes the price will fall.

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    Then you need to decide how much you want to invest in the commodity and when that investment will expire.

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    Binary Options Trading in Asia

    As Asia is a big region made up of several countries each with its own rules and regulations, it is only right to subdivide the topic and look at each country on its own. The following list looks at how binary options trading fares in the various Asian countries.

    Binary Options in China

    Arguably the biggest country in the world in terms of population and the second largest economy, China is every investor’s dream. However, its long history of restrictive laws and regulations that ban anything from Google to YouTube has largely kept investors away. The good news for binary options brokerage firms is, the Chinese government has not yet found a reason to directly address, or rather ban, binary options in the country. Knowing the Chinese government, this may or may not change in the near future. For traders and brokers alike, it’s a matter of crossing their fingers and hoping for the best, but having one foot out the door, ready for anything.

    When it comes to real binary options trading, China lags very far behind, despite hosting three of the biggest stock exchanges in the world. Currently, there are no brokers who are based in China and only one, AnyOption, with a Chinese platform. This lack of attention by brokers towards the country is disappointing, considering the poverty levels there are very low and a lot of families have disposable income from the many economic activities they engage in. A good broker would know how to convince them to invest all or part of that amount into binary options trading.

    Binary options trading in Asia has led to good profits

    When it comes to binary options regulation bodies, there are none in China except perhaps the Central Bank, which only regulates financial institutions, including brokers based within the country. Foreign based brokerage firms are exempt from this policy but for a smooth trading experience, we advise Chinese citizens interested in binary options to look for brokers that are licensed or regulated by European bodies such as CySEC and the EU. These bodies are the best in the world when it comes to setting and inspecting quality standards in the financial industry, within which binary options falls.

    The only policy that could perhaps pose a problem for traders in China is the one limiting the amount of money a Chinese citizen can invest outside the country to $50,000 per year. This is probably meant to encourage people to invest more within the country since foreign investments are very few. Nonetheless, the requirement won’t pose much of a problem for binary options traders as $50,000 is more than a standard trader would normally invest as the capital requirements in binary options are very low. Most brokers will ask for a minimum deposit of about $250 and there are even some who go as low as $10. The Chinese are known to find ways to get around the tough laws in their country and it wouldn’t be a surprise to anyone if some traders used family or friends’ credit cards to make deposits. After all, the government can’t really snoop on a billion individuals, can it?

    Binary Options in Japan

    Japan’s population is way smaller than that of China but as a fast growing economy, it can’t be ignored. The good thing about the country is that the government is known to be a bit more accommodating and the rules there are very friendly to investors. Binary options is 100% legal in Japan and unlike China, there is no limit to the amount a citizen can send out of the country. Japan can be considered quite a conservative country and its entire financial system is strictly regulated by the Financial Services Agency (FSA). The body was established in 2002 and is responsible for the supervision and regulation of every sector that deals in finances, including the banking, insurance and accounting industries.

    Since it wouldn’t be entirely possible for the FSA on its own to supervise all the financial services companies within the country, it has a department that deals with matters like the securities exchange, within which binary options can be classified. The body, based in Tokyo, is known as the Securities Exchange Surveillance Commission (SESC) and its mandate is to license and closely monitor the activities of firms involved in the buying and selling of securities. Note that this only applies to firms based in the country and not every firm that transacts with Japanese citizens. The strict financial regulations keep many brokers out of the country. Many prefer to set their bases in countries with less restrictions such as Cyprus and serve Japanese traders, along with those from the rest of the world, from there.

    Japan has a growing middle class which is increasingly looking for alternative investment platforms, away from the usual real estate and stock trading. This is good news to brokers who will definitely have an easy time attracting the attention, and money, of the wealthy and experimental Japanese citizens. Furthermore, the lack of any brokers headquartered in the country is not a big issue since binary options is not like stock trading where physical visits to brokers’ offices are necessary. Here, traders can sort out any issue with their broker or ask any questions they might be having via Skype or email.

    Asian traders are good risk takers, that is why they succeed

    Binary Options in Singapore

    Singapore, though often overlooked, is among the fastest growing economies in the world. Whether in insurance, tourism, manufacturing or the service sector, there is a lot of money in Singapore. Binary options is not quite as popular in Singapore as it is in the other Asian countries. This is however not due to any negative reviews or anything else other than the fact that Singaporeans only became aware of binary options about two years ago. With that being said, a few significant steps have been made in making people aware of the potential returns and convenience of binary options. The Monetary Authority of Singapore is the body responsible for regulating all financial institutions, including brokerage firms.

    Binary Options in India

    India has quite a big population, some of whom reside in almost every corner of the world. Traditionally, India is a trading country and its citizens are known for their entrepreneurial spirit. They do not just trade in tangible goods alone; the Indian Securities Exchange is the oldest in Asia and among the oldest in the world. Although, binary options may have been only recently introduced, the concept of asset trading has been around for centuries.

    It is legal to trade in binary options in India, which is not known to have very tough laws. Binary options, and all financial services are under the supervision of the Securities and Exchange Board of India (SEBI). The body gives out licenses to brokerage firms intending to set up shop in India and monitors them to ensure that they stick to the rules. There are currently no Indian-based binary options brokers although many European brokers accept Indian brokers, provided their government has no problem with that. When it comes to the trading language, only one broker, One Two Trade has an Indian version of their site. Hopefully, this will change soon as brokers everywhere realize the amazing potential of the Asian market and India in particular.

    Even the older traders can learn new things with binary options

    Binary Options in Malaysia

    Malaysia has not been left behind by the binary options bandwagon. Investors and even ordinary people in the country are warming up to binary options trading as a platform for channeling their investments. Binary options is legal in Malaysia and all activities are supervised and regulated by the Securities Commission of Malaysia, which operates under Bank Negara Malaysia, which oversees all financial services.

    We did not come across any broker based in Malaysia but found quite a number of firms operating from other countries accepting Malaysian traders. That is, if they understand English since there’s no site translated into Malay, the country’s national language. Chinese / Mandarin speakers are quite lucky as there is a trading platform in their national language, as mentioned earlier.

    Binary Options in Indonesia and the Philippines

    The Indonesian and Philippines governments have no issues with binary options although some might consider the taxes on returns to be a bit high. There are no particular binary options regulation bodies that we know of, except maybe the Central Banks of the two countries, which are normally in charge of the whole financial sector. As such, we advise traders based in these two countries to look for brokers regulated in the EU, preferably by CySEC to be assured of quality service and reliability.

    Conclusion

    As the rest of the world experiencing slow growth, Asia is among the very few regions set to register double digit economic growth in the coming years. Naturally, as Asians become richer, they will start looking for ways to invest and binary options, with its high returns, is as good as or better than other options.

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    Why trading binary options and gambling are quite different things

    Binary options attract more and more attention, because it is a great way of earning considering the simplicity of their usage in the buying process. Only imagine next situation: deal with expire time from 30 seconds and up to several months, approximately may make a profit of about 80% of the total cost of the option. This was the real reason for the rapid growth of interest in this type of trading in the financial market.

    Is trading binary options gambling or it is completely different things? In order to really answer this question intelligently, at first, remind yourself what is gambling.

    The goal of each and every gambling is targeted at inciting excitement in player. For example, the well-known card game “Poker”, which is all considered gambling. But does it really evoke strong emotions in people? In fact, an ardent gambler, she’s probably really excited, but, for example, for the dealer is nothing more than a job. Hardly professional croupiers will argue that he is actually a gambler. In any case it is a link that is definitely allotted role in this game and not much more. In other words, the perception of the game. It’s like in a hockey game that for fans this is a real game, and for players work.

    Therefore, given the above induced opinion and taking into account he binary options market, where people perceive the Forex trading, as a game, therefore, likely to experience the passion. Therefore, it is logical to assume that his position will be similar to any gambling. At the same time, the person who objectively looks at things, has a real understanding of what is happening and to adequately assess their capabilities, never will be related to binary options trading as gambling. The essence of the perception, not in the lesson, and what people will do in a given situation.

    Brewing logical question: why the gambler is not a bit of work on binary options? And it’s all quite simple:

    • the player originally will be allocated to the trading process as a game — hence the action often will be ill-considered and frivolous;

    • more than likely, these people will not learn anything, relying on fart and perceiving the learning process is a waste of time;

    • high embernet the occurrence of excessive expectations, often will be associated with a profit in the first seconds.

    BINARY OPTIONS AND GAMBLING

    Very often you can hear that the options trading looks like the well known game “Roulette”, wherefore winning is impossible. First and foremost, to win here, obviously, the truth will fail, however, to start earning in a very real way. additives important here is the approach to this activity and its human perception. These two things resemble one another due to the fact that roulette as well as in options trading, you can make bets at random, or to calculate all possible combinations to remember past results and calculate the probability of an event.

    A similar result in trading binary options — someone will come for the freebies, the result is playing will deposit lose, and someone will start to earn real money by earnestly studying, examining the experience of other successful traders, analyzing the trends and the situation of market, knowingly invented and use technical and fundamental analysis. Trader also needs to be armed for victory.

    Anyone who seriously trades binary options never call it a game, because he would not a priori to experience the excitement. In fact, top traders, to achieve real success in this field, will always look at binary options trading soberly. After all, they really understand that the thrill of destruction. Hence, the person who wants does not want to play, but seriously to make money trading in the financial market, he must learn to take seriously, not to be confused with the conventional gambling. After all, the one who wants to, he will always find a 100% similarity in all this, mixing the result of trade and game, when in fact it is quite the different classes.

    Little advice for everyone: if you have a feeling of unhealthy excitement during the trading process (similar to gamblers), then right immediately quit with it, because it is well known that emotions still haven’t helped to reach the desired results nobody.

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    “General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

    Could Complex Bitcoin Derivatives Be The Next Big Thing

    According to a widely circulated report last week, a number of firms are launching new derivative products tied to Bitcoin. Structured products and bond-like derivatives are being conjured up to attract sophisticated investors.

    Bitcoin Price Rally Attracts Greater Interest

    While the institutions have yet to arrive in their droves, the 2020 Bitcoin price rally has attracted greater interest in some of these esoteric products according to Zero Hedge. The report cites an original article by the WSJ published last week. It states that this rally has had a similar effect to the 2020 one which spawned the birth of Bitcoin futures.

    Products such as reverse convertibles are structured offerings that generally consist of a high-yield, short-term note of the issuer. They are linked to the performance of an unrelated reference asset, in this case, Bitcoin. Zero Hedge adds that extreme caution must be exercised for those considering trading these products.

    “We all remember how Wall Street banks’ creation of synthetic CDOs and other complex derivatives tied to housing worked out. Some assets simply aren’t well-suited for these types of derivatives.”

    The Variety In Offerings

    Demand for this type of product is pretty thin at the moment and the WSJ could only find two firms exploring them. Crypto hedge fund Cipher Technologies is one such firm which began offering structured products on BTC earlier this year. However, founder and managing partner, Gerald Banks, told the outlet:

    “We would not fathom pushing this to anyone who would not be fully versed in the risk or in the nature of the underlying asset,”

    A reverse convertible is one of the products on the table. In this instance, the client loans money to the firm in return for monthly interest payments and loan payment in full once the contract expires. However, if Bitcoin price falls below a predetermined level, which it did earlier this year, Cipher returns the principal minus the amount BTC has lost.

    GSR, another crypto firm led by former Goldman Sachs commodities traders, has unveiled various products this year. Some of them include binary options which pay on price direction and variance swaps which payout based on Bitcoin price volatility.

    SEC Unconvinced

    Former SEC economist Craig McCann thinks these so-called “investment products” are a bad idea. According to him ‘there are all kinds of problems associated with any structured product tied to Bitcoin.’ At the moment these niche products are yet to attract wider interest, but this was also the case when CBOE and CME launched their futures in December 2020.

    What it does show is that the space has matured enough over the past couple years to even get complex Bitcoin derivatives on the table.

    Is there a viable market for such investment products? Add your thoughts below.

    Trading Bitcoin Binary Options

    Bitcoin. This may be something you wish you knew more about. You may have heard about trading Bitcoin and wondered how you could do it. It may seem unreal since it does not involve anything tangible.

    A visit to the Bitcoin web page informs the visitor, “Bitcoin is an innovative payment network and a new kind of money.” It further notifies the public, “Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.”

    Bitcoin was invented in 2008. In early 2020, each Bitcoin was worth only $0.04. Just last week, on October 29, it was reported that Bitcoin was trading above $314, near the highest since December 2020. This rise in price was thought to be related to the Fed statement that had been released the day before, but also strongly tied to China easing which appears to go straight to Bitcoin. (See Bitcoin Soars Near Highest Since 2020 As China Outflows Accelerate)

    Today, CNBC reported Bitcoin trading at more than $410, a price jump of more than 70 percent in one month. According to an article on Zero Hedge, after the price jump, there was a massive sell off causing the digital currency to drop by nearly $50. This article attributes the volatility to the influx of new Chinese buyers who have caused this surge “in order to bypass China’s tightened capital controls.”

    As you can see from the news reports above, Bitcoin can be insanely volatile. It can move 40 percent in one day. In checking current charts, Bitcoin has rebounded and is currently trading around $470.

    In order to illustrate different ways Bitcoin can be traded, let’s look at how Bitcoin was trading on October 29. Look at the chart below.

    To view a larger image, click HERE.

    This is a Nadex Bitcoin daily chart, which can be accessed from their trading platform. You can see that Bitcoin has surged up through 314. There was some long-term resistance at 314. The market had tested that level in January, February, June and July before breaking through on October 29. When this happens, you can usually expect that it will meet a little more resistance and then pullback.

    There are a couple of different ways you can play this. You could expect it to expire below the high of the day at 319. If so, you could check out available strikes that you could sell. When you check for a contract, sometimes there may not be many contracts left, because of the surge in the market. Nadex offers bitcoin binary options with 21 strike prices for the 3:00 PM ET daily expiration, except on Fridays, which lists 15 strike levels. The interval width between each strike level is 1.5.

    The next image shows the different strike prices that were available at the time. When you look for the sell strike, you see that there is a 315.5 available for around $21. Choosing this trade would allow you to make a little bit of premium if you wanted to go short.

    To view a larger image, click HERE.

    If you believe the market will stay above 314, you can look at buying a contract. Again, checking the strike prices, there is one available at 314 for about 65, with the profit potential of $35.

    For October 29, it appears that 314 is the magic number, the resistance level right now. By knowing this information, you can have a better understanding of the expectations of the market. Here is another image taken a short time after the other image, which showed strike prices. You may notice that both the buy and sell prices have increased as has the indicative index.

    To view a larger image, click HERE.

    However, for this example, with the strike 314 at 70.75, it is $0.76 above the strike. There is a high expectation of the market staying above 314.

    Remember, the first chart was a daily chart. For a better analysis on either of these trades, it would be wise to look at a smaller time frame chart in order to see what you could actually do. When you look at a five-minute chart, it shows how the market popped up and then promptly turned around and went down. Here is a five-minute chart:

    To view a larger image, click HERE.

    Further analysis using the five-minute chart shows that if there was a shark in the waters and they wanted to push the market a little farther, it is possible they could have caused the big green bar that broke through the 314 resistance. The next green bars are other traders coming in thinking there is a big rally. Take note here, all of a sudden at the short red bar, they start getting rid of their trades. Next, they dump off the rest and everybody bails. This is how it usually goes in trading. This is how you learn to follow the sharks without getting eaten by them and staying out of their way. The sharks will go in, pump up the market and then sell it off. You get your one warning shot, the short red bar, and then BAM! It is over.

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