Binary Options—Gambling or the Future of Trading?

February 27, 2015 Updated: April 25, 2016

The financial industry did not very much the last years to improve its reputation. Consider the huge amount of bonuses CEOs receive annually. But the most striking example is the financial crisis which affected large parts of Europe, with Greece on the edge and many other countries struggling with the austerity policy proposed by large European countries such as Germany and France.  However, the current reputation did not stop investors from exceeding their portfolio of investments, including people who are not trained to be an investor. One such very popular product is the binary option. Some call it gambling,  proposers an easy way to enlarge the content of their wallets. But who is right and what´s the current status of these products in Europe?

Particularly Risky

Binary options are an exotic financial product which are available via every personal computer that has access to the internet. Perhaps the greatest reason why they are so popular is that they do not require in—depth knowledge of the  industry. They only require a decision from the trader, whether the price of the asset falls or rises. Simple as that. If the trader makes the right choice,  then the trader gets a ROI up to 80 %. If the opposite occurs the trader gets nothing. Besides their easy construction opponents say that trader doesn´t even recognize that they lose money. Since a new option is just a fraction of a second and a mouse click away. That´s what makes binary options risky.  But is their character sufficient to make that parallel with gambling? The answer is no.

Data Provides Starting Point for Estimations

Consider the famous roulette. Playing roulette provides the person with the three possible results, red, black and a zero. While playing , the roulette ball cannot be influenced by the croupier. Thus,  the landing position of the roulette ball is not under control of the player. With binary options the situation appears to be slightly different. Of course exact prognosis of the asset price cannot be made, but experienced traders know that their chances rise with the next piece of information about the asset they consume. This increases their chances of a positive result.

Large Scene in Europe

Especially in Germany, where skepticism is widely disseminated, not only towards privacy issues , binary options have yield a strong position among many demographical segments. That is shownin the huge number of communications not only in niche publications but also in mainstream media such as mainstream TV channels and print advertisements. All trying to tip the scale in favor of a particular broker. One broker is even located in Frankfurt, the heart of the financial district in Germany. An aspect that is not common within the branch of industry, as most brokers are located in Cyprus. Yet, this is not a reason to doubt their reliability. Because they are still regulated by the strict guidelines of the European Union.

Information Needs Are Met

Given the number of traders information portals is growing ever since. One popular example is This site provides an objective overview of trading framework conditions, brokers and strategies. Besides in Germany a niche for the financial products has been evolved in  Italy. The southern state provides its traders with the recent information about the binary options on this site Here traders get informed about the recent industry news, as well as in depth information about signals, brokers and the popular bonuses which jeopardizes the ROI of the trader.