Binary options

Binary Options are a financial derivative designed to speculate on whether the price of the asset to which the derivative is replicating, ends up above or below the price, in the marked time (sometimes in low timeframes such as 1 minute for example).

They are different from the financial options that we saw before, since they only speculate on the movement of the asset to which they refer, and not on the time as is done with financial options. In binary options, time plays in our favour as it is fixed (which is the opposite of financial options).

Characteristics of binary options

  • If the price ends up above or below your entry you will make or lose money respectively. Which makes it very simple to understand.
  • There are no commissions for trading.
  • There are many maturity possibilities, especially in the short term.
  • The returns are attractive.
  • They are not regulated.
  • Not for beginners, there are many losses with this product.
  • In itself, they are betting systems, therefore Binary Options brokers encourage you to be a gambler instead of an investor.
  • There is no “real” Binary Options market, you actually trade against the broker, who will be very interested in winning.
  • There is no trade management, this means no stop loss, no target or take profit, among others. This topic will be discussed later, and you will understand why it is important to manage the operation.

Are binary options taxable?

In particular, the forex market and binary options are subject to normal corporate taxes.

The same applies to forex traders and all those whose exotic trading options do not enjoy tax exemption on stock exchange profits.

They are not recommended at all, but as it is a trading course we believe that you should know what financial instruments exist and make your own decisions. 

Our recommendation is that you look for another type of financial asset.
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