Binary options industry is always changing and developing new products and services. Binary options exchanges are the last innovation that offers a whole new trading experience for traders all over the world.
Binary options are already a well-known product that traders are familiar with, but binary exchanges represent a new step in binary industry progress. As always when something new occurs, it is expected that traders will wonder how to trade on binary exchanges and what they really are. The answers to both questions will be delivered in the article that follows.
What is a Binary Options Exchange?
Binary options exchanges are a new and innovating way of participating in binary options markets. In traditional binary options trading, traders are placing their trades against the broker, so many believe that broker is experiencing a conflict of interest which prevents traders from making a profit. While this is true for some brokers, it is not a valid statement that can describe all of them.
Binary exchanges, on the other hand, operate in a different way. They are a mere platform where traders place trades against each other. Instead of accepting a trade delivered by the broker, traders can take a look at what other traders are thinking about price movements and trade against them. Binary exchanges usually charge a small fee for providing the trading platform but are not actively involved in trading. Both sides are exposed to risk, and they have to learn how to manage it in order to make the most out of binary trading.
How are Binary Options Exchanges Traded?
In order to trade on binary options exchanges, traders first must understand how they are traded. After registering and making an initial deposit, the trader can start taking positions against her peers and binary trading colleagues. One trader takes one side of the trade, and the other trader is on the other side.
Of course, this means that sometimes, when binary options exchanges are traded, there is no one to take the other side of the trade which drains the liquidity.
Binary options exchange rates vary from exchange to exchange and there are no two binary options that have exactly the same level of service, platform and exchange rates. Binary Exchange technologies are different as well: some binary exchanges are traded more or less similar to traditional binary trading, others are mere platforms, but there are also binary exchanges that are using advanced technologies. Binary exchange technologies are sometimes enabling platforms to offer automated trading, like in the case of Daweda Exchange.
Daweda Exchange is using binary options exchange combined with an algorithm, that allows traders to place automated trades on the binary exchange. This approach is rarely seen and definitely requires some additional education about how auto trading works on binary exchanges, but traders can experience a whole new type of binary trading on Daweda Exchange.
Binary options exchange technologies and rates are highly influencing user-experience, as traders are always looking for a reliable platform and good rates.
Binary Options Exchange – Solution to Binary Options Scams?
Unfortunately, binary options industry is not immune to scam brokers who are always looking for new victims to take money from. Such brokers create a bad reputation for the entire industry and make many people believe how all binary options brokers are scams ready to take your money.
Of course, not all brokers are scams, but binary options exchanges are offering a different approach that could be considered more reliable as traders trade against each other, and not against the house.
Of course, this doesn’t mean that binary exchanges have no risks attached. Proper binary options education, using of demo accounts and careful approach are necessary as always.
Binary Options Exchange the USA
Many binary traders in the USA are wondering whether or not there are some binary options exchanges that are welcoming the traders from the USA. US traders will be happy to know how the only legal way to trade binary options in the USA is via binary exchanges!
Of course, it is important that the binary exchange is regulated by the CFTC, the US regulatory body for binary options trading. US binary exchanges are serving as a replacement for European type binary options brokers who are not allowed to operate on the US market. One of the most popular binary options exchanges in the US is NADEX, but there are others as well.
Are Binary Options Exchanges the Best Way To Trade Binary Options?
In the beginning, traders were only able to trade binary options in the traditional way, but meanwhile, many innovations took place. Automated binary options trading, signals trading, social trading and binary exchanges – these are all new types of binary options trading that traders have at their disposal.
There is no unique answer whether or not binary options exchanges are the best, only and most profitable way to trade binary options. It is important that not all traders are equal, as each of them has their own aspirations and goals. Binary options exchange trading via platforms like Daweda Exchange or Nadex can definitely bring a whole new level of experience as it is simply different, but yet the same.
As always, it is recommended to trade with regulated platforms. For binary options exchanges in the US Nadex is a popular choice, but there are also regulated exchanges in the other parts of the world, such as DawedaExchange that has a CySEC license.