What do you think about binary options? Are they a valid trading instrument or just plain gambling?
I'd never heard of it. When you say "gambling" do you mean more gambling than the stock market already is?
Binary options are an all-or-nothing trading vehicle with two possible outcomes, win or lose. They are offered in two ways, on U.S. regulated exchanges like NADEX or OTC from off-shore brokers. Many in the financial industry have been negging binary options because of the perceived risk and because they are only good for speculation. The thing is, speculating of any kind is gambling. I have been researching binaries for several months now and have concluded that they are as viable a "trading" instrument as any other form of option, future or derivative. Note that I did not use the word investment because binary options are not an investment. Aside from speculations they are also good for hedging positions.
Sounds very risky to me especially If I had to depend on OTC off-shore brokers. It sounds really imperative with an option like that, one would need a very reliable broker and 100% communication ability. It sounds like you would have to be on top of it constantly. I don't expect a reliable broker and 100% communication on a regular order from a well known broker on a big stock.
One time I was making a sell order and the ding dong on the phone bought instead. I was short on funds to cover it but it went through somehow, when the broker should have realized it was a sell based on funds available. They always claim they record every call, but when I called back and got a manager, suddenly they didnt have it recorded. The stock was moving up and they had to sell it he said, and I argued as long as I could because I believed it would go higher and it did. They pocketed the profit. All I got was a headache. After my original sell goes through they charged me for 2 trades. I would hate to play that with some OTC options all or none, ya know?
No doubt, that is why I highly recommend U.S. traders to stick to U.S. regulated brokers and exchanges. I also suggest handling all your own orders with an online account, there isn't really any need to go through the hassle of using a broker over the phone anymore....
Normally I did at that time but it seems the online was down. Or I had to make the trade on the phone because I was away from comp, sometimes you gotta make a trade fast with what you got. That would be my biggest concern, whether I could make a trade anytime anywhere quickly. But even then there was no guarantee.I tried TD Waterhouse, (TD Ameri nowdays?) ETrade and Scottrade. Even the Lynch-mob cant guarantee any buy or sell.
Unfortunately that is true, I try to stay away from any trades that I have to make "right now".
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