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  1. #1
    Specialist Member marc's Avatar

    2 questions before going live ... !!!

    I hope some of you experienced traders (or maybe even an insider) can shed some light into my questions/concerns ...

    #1
    I wonder how Binary Brokers earn money ... do they profit even if you win large sums of money? ... like earning some spread/commission as a market maker? ... or is it actually like a casino, that they only will earn money, if you lose in the 'long run'?

    #2
    I have read the trading terms/terms of use of some brokers (4xp and anyoption) ... without going much into detail here, it's rather concerning, as it sometimes reads like 'we can do with your money whatever we want at any time and we don't even have to tell you' ...

    So, does anyone of you ever had such an bad experience? ... like completely vanishing money/account? ... or 'crossing your strategy' because of limiting your order amounts/number of trades?
    (I don't speak of the common 'misunderstanding of bonus money' and the 'slow/or charging for payout' things)

  2. #2
    Active Member pipshunter's Avatar
    Hi, marc. I am not insider but I think I know how this industry is working. Binary options brokers profit from the spread of in and out of the money options - That mean the overall expectation to all of their customers – traders will be zero. Some traders lose and some win. This doesn’t mean they have any problem with you if you are wining trader, because they have a bunch of losing traders. That of course apply only to best and honest brokers, some of the lowest class scam brokers could really steal your money. Although these are rare exceptions you have to be aware of them and be careful when selecting your broker.

  3. #3
    Administrator Martin Kay's Avatar
    Let me tell you one thing, hope this will guide you on your journay to binary options trading. As pipshunter said above,
    Binary options brokers profit from the spread of in and out of the money options
    (which by the way means that the broker profits from your losts....). The thing is, it's not always true - say 1 person placed 20k on call, the other 5 traders placed total 5k on Put. Now the call won - the broker is down 15K's. Now if i'm a new broker, or just a scam broker - how would I pay this guy?? There's the problem. A broker needs to have a large base of clients so it could afford the losses.

    That brings us to 1 conclusion - Trade only with trusted and well known brokers. Don't look for trouble. Start low, and increase your volume when you feel safe with the broker you're using. I don't have tell you where to find good brokers - you're an active member of this community, you know your way around.

    BTW- Im actually working on article about this issue. Hope it'll provide best answers to all of those seeking for the truth.

  4. #4
    Specialist Member marc's Avatar
    Thanks for the answers ...

    yes, I am very cautious ... and sorry for being somewhat offtopic here [but I couldn't post in the broker section]

    I have opened an account with 4xp (before I registered at BOTS) ... but as far as I could gather infos about them, they seem to have a good reputation ... they are regulated (which was important for me) and they are not sitting in Cyprus (I was somewhat weary about the crisis there ... they are in business since 2003 and BO are not their only business, so I hope I made a good decision here ...

    Maybe any of you do have experience about them?

  5. #5
    Master Member Bogdan G's Avatar
    Hi Marc.
    I have no experience with the broker you mentioned, but your point #2 is very important and indeed concerning. I have read a lot of Terms and Conditions from different brokers and you are right: sometimes the things written there give them complete control over the trader's money. But usually new traders are totally blinded by the profits promised and totally forget to read the Terms and Conditions. BIG mistake!

  6. #6
    Specialist Member marc's Avatar
    Hi Bogdan,

    your are right, but so far I haven't seen 'Terms and Conditions' without any concerning paragraphs ... however, I am not a lawyer, and I am sure there are differences between the brokers ... and I think, if you read the terms of a simple insurance contract or open an account at your local bank, you will probably read similar things

    That was the reason for my first question .. I think, as long as you win a few hundres dollars a day, there will be mostly no problem ... but if you start to win big constantly, a broker might be tempted to find away to stop that ... admittedly, that are just my sceptical thoughts as a beginner ...

    But may I ask, which brokers you personally prefer? ... for FX trading and for BO?

  7. #7
    Specialist Member marvel's Avatar
    Quote Originally Posted by marc View Post
    Hi Bogdan,

    your are right, but so far I haven't seen 'Terms and Conditions' without any concerning paragraphs ... however, I am not a lawyer, and I am sure there are differences between the brokers ... and I think, if you read the terms of a simple insurance contract or open an account at your local bank, you will probably read similar things

    That was the reason for my first question .. I think, as long as you win a few hundres dollars a day, there will be mostly no problem ... but if you start to win big constantly, a broker might be tempted to find away to stop that ... admittedly, that are just my sceptical thoughts as a beginner ...

    But may I ask, which brokers you personally prefer? ... for FX trading and for BO?
    Hi, marc. I personally use two binary (StockPair and Anyoption) and one forex (Oanda) broker and I am fully satisfied with them till now. Of course I don’t make a lot of money to know what will be their reaction , but I am pretty convinced that everything will be just fine no matter of my profits, because this brokers are the biggest ones with a lot of customers and pretty stable business with everything necessary to fulfill the their customers needs. If such a broker refuse to pay your earnings it risk to lose its good reputation and that way it will lose most of its customers. That is much worse for them, than lose some bucks paying you one big check

  8. #8
    Specialist Member marc's Avatar
    Marvel, thanks for the info ... you are right, the big brokers will surely have to look after their reputation ... well, at first I'll have to earn money anyway

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