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Where to Trade Binary Options

Many binary trading platforms by brokers are well-designed and easy-to-navigate. You can get all the information you need about the assets being traded right from the platform to help you make decisions about possible future developments. Nevertheless, it still pays to have more in-depth knowledge regarding where to trade binary options and how to pick your markets.

Binary options are widely traded on the Nadex Exchange, which is the oldest legal binary options exchange in the U.S. Nadex has its proprietary browser-based trading platform which binary options traders can access via a live account or a demo account. The Nadex Trading Platform provides traders with real-time charts as well as direct market access to the latest binary option prices.

Nadex Platform

Nadex Platform

The Chicago Board Options Exchange (CBOE) is perhaps the more popular trading platform because this is what is typically offered by most option brokers. If you have an options-approved brokerage account, then you can access the CBOE traditional trading account. However, it's important to note that not all traders have options trading available on their platforms.

Trading fees

Each Nadex contract costs $0.90 to enter and $0.90 to exit. The fee is capped at $9, meaning that purchasing 10 or 100 lots costs the same--$9. If you hold your trade till expiry and it finishes in the money, then you are charged an exit fee. If, however, you hold the trade but it finishes out of the money, you will not be charged an exit fee.

CBOE binary options are offered through many brokers, and each broker charges their own commission fee.

Picking your binary market

You can trade multiple asset classes using binary options. Nadex offers trading in the major indices including S&P 500 (US 500), Dow 30 (Wall Street 30), Nasdaq 100 (US TECH 100), and Russell 2000 (US Smallcap 2000). Global indices such as FTSE 100 for the U.K., German 30 for Germany, and Japan 225 for Japan are also available. Traders can trade currency pairs including EUR/USD, USD/JPY, GBP/USD, AUD/USD, EUR/GBP,EUR/JPY, USD/CAD, and AUD/JPY.

Nadex also offers binary options that are related to commodity prices including oil, gold, silver, copper, soya beans, and corn.

It's also possible to trade news events on Nadex. For instance you can buy call or put binary options based on whether the Fed will hike interest rates, or whether non-farm payrolls and jobless claims will come above or below consensus analysts' estimates.

The CBOE offers two main binary options for traders: an S&P 500 Index option (BSZ) that is based on the S&P 500 Index and a Volatility Index Option (BVZ) that is based on the CBOE Volatility Index (VIX).

Picking your time frame

You can choose binary options that expire hourly, daily, or weekly. Hourly options are mostly preferred by day traders and can provide steady returns for traders even in relatively quiet markets if the trader is good at picking the correct market direction over a small time frame.

Daily options expire at the end of the day and are mostly used by traders to hedge stocks, commodities, of forex against daily movements.

Weekly options expire at the end of a trading week and are mostly preferred by swing traders as the expiry date for options approaches on Friday.

Events-based binary options expire once the official news release related to the event is made. All types of traders can therefore can take positions in these options well before the event or just before the event.