What are binary options?
A binary option is a financial contract where the buyer can receive a fixed return or nothing at all. This contract goes like this. I invest a certain amount say $10 speculating that the price of USD/EUR will be higher than it is after 30 minutes. The options issuer agrees to pay me 85% of the invested amount if my prediction is correct. If not, I’ll lose my $10. After 30 minutes, the price is high as id speculated. So the options issuer pays me $18.5.
Are binary options legal?
The first binary options were introduced by banks in 2008. As the internet matured online forex brokers started offering binary options to the public. However, this attracted many fraudulent businesses which were out to make money from traders. This led to the intervention of many regulatory bodies across the globe.
For example, the CFTC in the USA doesn’t prohibit binary options trading. However, any exchange offering binary options has to be fully regulated by CFTC and or the SEC.
In Europe, regulators such as CySEC and the FCA also require brokers offering binary options to European clients to be fully regulated. In short, binary options trading is legal in many countries across the globe. The only country we know of right now that prohibits binary options trading is Israel.
Are binary options safe?
If you want to trade binary options, your major concern should be whether the broker or exchange you invest with is fully regulated. Take IQ Option as an example. This broker is fully regulated by CySEC to offer financial instruments trading services to European citizens. This means that your investment is fully insured and incase the broker fails, you will be compensated.
Although your investment is fully protected, this doesn’t mean that you’ll be successful trading binary options. There’s always the risk of loss. However, you can increase your chances of profiting by practicing using the IQ Option demo account, adopting a good trading strategy and practicing sound account management techniques.
trading account verifying
Every new IQ Option trading account must be verified. This is one of the requirements set by CySEC, IQ Options main regulator. Although most traders find the account verification process irritating and time-consuming, it’s to their advantage. Also, it’s a one-time process.
Two reasons why account verification is necessary are:
- CySEC can only compensates traders who can prove they had deposited funds with the broker in case it goes under. A verified account is all you need.
- Account verification allows IQ Option to adhere to international laws that prevent money laundering.
If you’ve opened an IQ Option trader account and are yet to be verified, here are the steps to take.
Step one
Login to your IQ Option account using the details you used to register your account, click here below.
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Step two
For the website click on the personal details tab. This directs you to your personal profile. Scroll to the bottom of the page and click on the account verification link.
For the trading, app Go to Settings -> Security
Step three
At this point, you’ll be required to verify two things, your email address and your phone number. Click on verify email.
Go to your email and open the email sent by IQ Option. There’s a special code that you’ll need to copy and paste in the IQ Option email account verification page. Once pasted, click on the continue button.
To verify your mobile number, you’ll need to enter it on the field provided. Click on send code. IQ Option will send you a unique code which you’ll need to enter on the site to verify your phone number.
Note that IQ Option will confirm that your email and mobile phone number have been verified immediately you enter and submit the codes.
Step four
Finally, you’ll need to complete your personal profile. This involves entering details such as your names, address and date of birth. IQ Option requires a copy of your ID or passport if you haven’t sent it already. The data you enter in your personal profile should match that in your identification document.
Click to save.
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