What does a binary options broker make money on?
How a trader makes money on binary options, we figured out earlier, but in order to start earning, you need to understand how a binary options broker earns. At the beginning, figure out whether your broker is really a broker or is it a “financial kitchen”. How to check this, you can find out in the article “How to choose a binary options broker?”.
How does a real broker make money?
To do this, you need to know what a binary option is. If we buy an option, there is someone who sells it on the other side (option sellers). Brokers pay from 71% of the value of the option if you earned. At the same time, if you made the wrong conclusion, the loss is 100%. This is the difference between the payment of the earned amount to the buyers of the binary option and the amount paid (option premium).
Let’s look at an example:
A trader buys an option worth $100. The payout should be 85%. Thus, if the trader made the correct conclusion on the options strategy or other system, he will receive $ 85. At the same time, the seller of the option lost 100%. The difference is 15%, in this example $ 15 and there is the earnings of an honest binary options broker.
If the broker is honest, he is interested in you making more transactions and with more volumes. The broker is on your side. If you earn, the binary broker earns too.
On the other hand, if you make the wrong bet, you will lose 100% of your amount. Part of the funds will go to the option holder, part will remain to the broker. Since the broker does not hold options, respectively, its commission is less than 15%. This is one of the reasons why binary options brokers offer traders free trading signals, follow-up, and training.
LOW PAYOUT PERCENTAGE OF IQ BINARY OPTIONS BROKER. IN THE CASE OF EARNINGS YOU GET 48%, IN CASE OF LOSS YOU LOSE ALL 100%.
If your broker is not a broker, but a “financial kitchen”, he earns from your losses. Since the broker does not display traders’ trades and does not use a liquidity provider, it works on the balance sheet. The more people lose money, the more such companies earn. In this case, the binary broker plays against the trader. Such brokers delay payments, tie traders with huge bonuses and do not respond to requests.
TO UNDERSTAND WHETHER THE BROKER IS ON YOUR SIDE OR NOT, READ REAL REVIEWS OF TRADERS
Inference:
If you want to make money trading binary options, you must choose an honest binary options broker.
By receiving signals, training and market reviews from the broker, your chances of a positive trading result will increase.
What tools does a binary broker provide to a trader:[list style=”plus”]
- Trading signals
- Trader’s training
- Accompaniment 1×1
- Market analysis
- Economic News & Impact[/list]
TRADE ONLY WITH HONEST BROKERS
