Learn how to trade Bitcoin in the forex market
Bitcoin binary options have become a popular form of investing in the cryptocurrency community. It gives you a chance to earn money in Bitcoin without having to trade for cryptocurrency. While the concept of binary options trading may seem complicated, it is actually quite simple.
Today, we will look at cryptocurrency binary options and how you can use them to make short term investments in Bitcoin and altcoin.
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What Are Binary Options?
The term Bitcoin binary options may sound like an overly technical term, but the term is an offshoot of options trading. In options trading, you’re betting on whether the price of financial instruments will rise or fall in a specific period of time. For Bitcoin binary options, you’re betting on whether the price of Bitcoin will rise or fall.
For example, if Bitcoin’s price at 12 noon is $13,750 and you think that the price will be above $13,750 at 4 pm, you’ll make a “Call” option. If you feel that the price will be lower than $13,750, you will make a “Put” option. When you guess correctly, you will be “In the Money” and will receive a payout. If you guess wrong, you are “Out of the money” and will lose your investment.
Options trading is an all or nothing wager. You will either win or lose. That’s why it is called binary options trading, at the result is binary. This is different than standard options, which allows you to purchase a financial product. A standard option would have a strike price where you could buy a security before the option expires. You cannot do this with Bitcoin binary options.
What Are the Payouts?
The payouts on binary options trading depend on the platform used. On average, you’re looking at a fixed amount payout ranging from 75% to 85% of your investment. For example, if you make a $100 call option with a 75% payout rate, you will get $175 in return. However, whenever you’re wrong, you will lose all of your initial $100.
Bitcoin binary options are considered a form of gambling due to the volatility of digital currencies. When wagering on binary options, you need to be correct more than 50% of the time to turn a long-term profit. This is unlike standard cryptocurrency trading, where one good buy can make up for months of downswings.
How to Trade in Binary Binary Options
Trading in Bitcoin binary options is much simpler than trading in traditional Bitcoin. Since you’re just betting on the price of a financial asset, it is similar to gambling at Bitcoin online casino games. To get started, find a legitimate trading platform and register for an account.
Once registered, all you need to do is fund your account. Most trading platforms will allow you to purchase options using either fiat or cryptocurrency. You can usually deposit using credit cards, e-Wallets, and even your bank account. Odds are you will have an easier time depositing at an options platform as they are not classified as online gambling sites.
After making your deposit, pick the options you wish to trade-in. Most sites focus exclusively on Bitcoin, while others will allow you to trade in Litecoin, Ethereum, and other popular altcoins. You’ll then pick the options contracts you wish to place and whether you want to make a call option or a put option. Options range from 30 seconds to as much as a week or longer, depending on the trading platform. Once your options are placed, just sit back and wait for the option to expire. Once it expires, you’ll receive a payout on any winning options.
Spotting Bitcoin Binary Option Scams
One major downside to trading in Bitcoin binary options is that many fraudulent sites are offering the product. There are a few things you can do to help weed out these scams:
Licensing – First, check to see if a site is licensed by the Cyprus Securities and Exchange Commission, the Commodity Futures Trading Commission, or another primary licensing authority. If the site is not licensed, move on to another site.
Demo Accounts – Most legitimate options sites will allow you to test drive the site with a demo account. This is similar to playing demo casino games at Bitcoin online casinos.
Spam Phone Calls – Many illegitimate sites will have “Senior Advisors” or other official-sounding personnel call you to try and convince you to deposit onto the site. Often, they will claim they have a deal that’s too good to pass on. If you’re getting unsolicited calls, move on to another site that respects your privacy.
Unrealistic Promises – If the site is promising atypical returns, such as making a 150% return on investment or making $1,000 in just 5 minutes, it is a scam.
Research Companies – The internet is a fantastic research tool, and you can usually find information on scams easily by doing a Google search. If the website does not have any reviews or feedback from users, that’s also a good indicator that something is amiss.
Bitcoin Binary Option Reviews
If you research on the internet, you will find dozens of websites that offer Bitcoin binary options trading. How do you know which are the best? To help you get started, we’ve included a couple of quick links to reviews for a couple of binary options trading platform sites. Both sites have been in business for years and have stellar reputations.
- SatoshiOption — SatoshiOption provides a variety of categories for its traders to choose from. This Bitcoin binary options site is not just your typical trading site, but it also offers an outstandingly secure and safe trading environment with a modern platform and brilliant features.
- Winoptions — This Bitcoin binary options site claims to use one of the most professional and fair binary options platform online. It accepts all major credit cards and payment options, and it also boasts of the best customer support out in the market.
Lastly, remember that Bitcoin binary options are more akin to online gambling than true investing. That’s because there is a chance of losing your entire wager. With standard investing, Bitcoin would have to go extinct for you to lose your entire investment. As such, only “invest” what you can afford to lose.
Binary Options Glossary
Learn more about common binary options terms here:
- Put Options
- Call Options
- Target Price
- Underlying Asset
- Market Price
- Options Contracts
- Expiry Level
- Expiry Time
- At The Money