Binary options trading is a good way to trade on the financial markets. Kenyans can now speculate on any asset price movements by trading binary options through a regulated international broker. Here we will explain how you can take advantage of binary options trading.
Binary options are derivative financial instruments that allow traders to bet on the direction of the market movements. They are called "binary" because they have only two outcomes.
The basic form of binary options are the "Call" and "Put" options. A trader will buy a "Call" option when he believes the market will move up, and a "Put" option when he estimates the market will move down. The option expires after a predetermined time frame (it can be anything from 60 seconds to one week, but the most traded options have a time frame of 30 minutes or one hour). If the price of the asset increases, those who bought "Call" options will receive a payout of about 185% of the option price, resulting in a profit of 85%.
To easier understand how binary options work, I will give you a simple example:
A trader buys a "Call" option on the price of Brent Crude Oil when the price of Oil is 45.00 USD per barrel with a payout of 185%. He pays 100 USD for the option with an expiration of one hour. After 60 minutes, when the option expires, the price of Crude Oil has climbed to 45.25 USD per barrel (an increase of only 25 cents). Since our trader bought a "Call" option and made the correct prediction that the price of oil will increase, he will receive the option's payout which is 185 USD. In only one hour, our trader received 185 USD for the option he bought with 100 USD, resulting in a profit of 85 dollars. Not bad!
As you already noticed, a binary option has several parameters:
Option type - CALL or PUT (also known as UP or DOWN)
Asset - it can be anything from currency pairs (EUR/USD or USD/JPY) to Oil, Gold or the price of Google shares.
Strike price - the price of the asset at the time the option is bought
Option payout - how much the option will pay in case of a successful trade (it usually varies between 180% and 185%)
Option price - the amount of money paid for the option (the trader can set this value according to his trading capital - binary options can be bought from as low as 20 dollars)
Expiration - how much time before the option expires (it can be 60 seconds, 15 minutes, 30 minutes, one hour, 4 hours or more)
Binary options traders can customize their options by choosing the option type, the asset and the expiration.
While all this may still sound complicated, you'll see that the platform is user friendly.
Trading binary options from Kenya is very accessible, as all major brokers accept Kenyan traders. You only need to register an account with a binary options broker (which takes no more than five minutes) and deposit funds into your account. If you are depositing using a debit or a credit card you will have your account funded and ready to trade in just a few minutes.
There are no binary options brokers located in Kenya, but fortunately for us all the major international brokers accept Kenyan clients. While there are many binary options brokers on the internet, we recommend the following brokers as they have the best reputation and are very quick when it comes to withdrawing your money:
Country: Antigua & Barbuda
Minimum Deposit: 10 USD
RISK WARNING: YOUR CAPITAL MIGHT BE AT RISK
Country: St. Vincent & The Grenadines
Minimum Deposit: 10 USD
RISK WARNING: YOUR CAPITAL MIGHT BE AT RISK
If you think predicting the market moves is difficult, there is still a way of trading binary options with success. Some experienced traders have developed computer algorithms that generate trading signals based on statistical indicators (this is known as technical analysis or algorithm trading). Those signals are then sent to the broker's trading platform and converted into real trades automatically, as the algorithm (also known as binary options robot) buys Call and Put options according to its trading strategy and calculations.
There is one such robot available to the public for free: Bin Bot Pro
If you think trading by yourself is difficult, you should really check the above mentioned robot and see if it provides the desired results.
Risk warning: Trading binary options involves risk and may not be suitable for everyone. By trading binary options it is possible to lose your entire investment. Do not trade with money you cannot afford to lose.