There is a busy week ahead on the economic news front with plenty of data due which are likely to influence markets and inject some potential volatility into the mix. The early part of the week is dominated by manufacturing PMI’s with German, US and UK data all due for release on Tuesday, also of importance will be the release of the Chinese manufacturing PMI. Finishing of the week will be the US non-farm payrolls which are bound to add some volatility to end the week off. Other factors that will have an influence on the markets this week will be the ongoing tensions in Ukraine and possibility of more sanctions being imposed on Russia by the west. In Europe there is increasing talk that the ECB will loosen monetary policy.
View economic data calendar here
As binary option trading grows in popularity, the number of different types of binary option trade types also becomes available, which enables seasoned traders to select the most appropriate method for their strategy and market conditions, as well as allowing novice traders to learn the trading skills required whilst using the basic type. This enables traders of any ability to use the same trading platforms.
Binary option trades have a various selection of expiry periods available including 60 seconds, 10 minutes, 15 minutes, 30, minutes, end of day and so on. You select the expiry time at the time of placing your trade. Once you have placed your trade the platform will monitor it and will automatically close the trade after the selected time period.
The easiest to use trade is the UP/HIGH/CALL or the DOWN/LOW/PUT option. A trader will place a UP/HIGH/CALL trade if they believe that the price of the asset will end up higher than the entry price at the time of the expiry of the trade or a DOWN/LOW/PUT option if they believe it will be lower than the entry price.
The TOUCH BINARY OPTIONS is a well used option which also has a number of varieties including TOUCH, NO TOUCH and DOUBLE TOUCH. This type of binary option trade with predefined levels needed to win the trade, rather than the trader predicting if the asset will increase or decrease. The trader will predict if the asset will reach (TOUCH) a set level or not reach the set level (NO TOUCH) With a DOUBLE TOUCH there are two predefined level. The payout is when on a NO TOUCH the defined level is not reached, on a DOUBLE TOUCH the payout is when both defined levels are reached. This type of binary option trades are typically used over a longer time scale such as 2 or more days.
The 60 SECOND BINARY OPTION is gaining in popularity and is a trade that expires after just 60 SECONDS making it very fast paced trading and is normally used if the value of an asset is clearly moving in one direction or for traders who are able to respond quickly to sudden market moves. They are basically the same as the UP/DOWN but with a shorter expiry time.
BOUNDARY OPTIONS is a form of trade used that is similar to a TOUCH OPTION, they can also be known as RANGE OPTION or TUNNEL OPTION. In this form of trading there are two defined levels. The upper and lower levels are defined (RANGE or BOUNDARY) the trader requires the asset to stay inside upper and lower levels to receive a payout. There are some variants to this type of trade where the asset must stay within the limits.
With Binary option trading being a relatively new and easy mechanism for investors to try and profit from financial market movements, regulation has not been able to keep up with their explosive growth, well that is until now. Slowly various regulatory bodies are trying to bring binary option trading under their financial regulatory umbrella, this however is still causing confusion due to the fact that different jurisdictions classify them differently. In Cyprus the regulatory custodians the Cypriot Securities and Exchange Commission (CySEC) have decide to bring binary options under the Investment Services and Related Activities Law of 2007-2009.Prior to this move by CySec the binary option market was totally unregulated within the European Union. This move by the Cypriot regulators has also put the binary option market under the scope of the Markets in financial Instruments Directive (MiFID). With the seemingly successful move by the Cypriot regulators other countries like Malta and Japan are following their lead. In Malta binary option trading and historically been under the jurisdiction of the Lotteries and Gaming Authority (LGA), but the Maltese Financial Services Authority (MFSA) are working on bringing under is regulatory umbrella under the provision of the Investment Services Act (ISA). Japan one of the largest markets for binary options has placed them under the regulatory umbrella of the Financial Futures Association of Japan (FFAJ). There are still other jurisdictions that are happy for binary options to stay under the regulation of gambling rather than financial services, this is the case in the United Kingdom and the Isle of Man and are making no apparent moves to change to the Cypriot way of thinking.
For traders regulation has to be top priority when opening an account and the moves by various jurisdictions can only be a good thing. Client asset protection is the number one priority and a regulated firm will have strict client money rules to adhere too, such as keeping client money ring fenced away from day to day operating costs. Firms will have to carry out better ID checks on traders, this will help to eliminate certain types of fraud. Hopefully this new regulatory environment will deter the more unscrupulous firms from setting up operations allowing the legitimate operations to grow without being tarnished by unregulated and possibly dodgy operations.
To make things easier for all traders all regulated and licensed binary option brokers should be instructed by their regulator to clearly show on their home page they are regulated and in which jurisdiction along with their license number and a link to the regulators website. This would make it easy for individuals to check and verify and would provide a certain amount of comfort when signing up. Brokers if genuine should have no issues about clearly stating on their website that they are regulated after all they have spent time and money to get this status. With the multiple jurisdictions available for binary option brokers to become regulated in, and with them all offering differing levels of protection for traders it will still not be easy but the binary option industry has to work at this and still has a way to go to get rid of the somewhat tarnished image which has been caused by certain unregulated entities in the infancy of this industry.