Busting the Top Myths About Binary Options Trading

Sean Sechler

June 10, 2021 at 8:49 AM·3 min read

In today’s tech-centric world, it’s amazing how easily false information can make the rounds. This is especially the case on the internet, where anyone can post anything at any time. It’s an issue that prevents you from finding the truth and making informed decisions that could benefit you in the long term.

For example, searching for the term “binary options” likely will lead you down a rabbit hole of fraud claims and misconceptions. This false information might even stop you from trading this fascinating and potentially lucrative financial instrument as a result.

That’s why we’ve decided to bust some of the top myths about binary options trading to set the record straight. Let’s take a deeper look below.

The Truth About Binary Options

Myth No. 1: Binary Options Trading is Illegal

One of the biggest misconceptions about binary options trading is that it is illegal. This myth likely has been spread because of numerous unregulated binary options trading platforms operating outside of the United States that have taken advantage of traders in the past.

The truth is that binary options trading is legal in the United States as long as you are using a regulated exchange. Trading on a regulated exchange means that the Commodity Futures Trading Commission (CFTC), the government agency that regulates futures exchanges, is ensuring that US regulated binary option exchanges follow strict guidelines and regulatory oversight. Trading binary options is more secure when using a CFTC-regulated binary options exchange versus offshore binary options providers.

Myth No. 2: Trading Binary Options is Expensive

Another common myth about binary options is that it requires a lot of capital to get started. This couldn’t be further from the truth — certain binary options exchanges like North American Derivatives Exchange (Nadex) allow you to get started with a live account for a low minimum deposit of $250.

It’s easy to understand why this myth has gained ground because trading other financial instruments like futures and forex tend to require thousands of dollars to get started. The good news is that this is not the case for binary options, which is another reason trading them is so attractive.

Myth No. 3: Binary Options Trading is Gambling

Because binary options trading involves choosing whether or not a certain market will be above a strike price at the expiration time, some people think it is simply a betting game. This is another myth that has caused countless people to miss out on the opportunity to earn solid returns with binary options trading.

Binary options trading is not that different from trading other financial instruments like futures and stocks. Case in point: You can exit the trade before the expiration time, which means you essentially have the same flexibility as you do with trading other securities. Additionally, binary options can be both bought or sold. You also need to have a solid strategy and game plan for successfully trading binary options, which is why trading a demo account with Nadex is a great way to get started.

Don’t let common myths and misconceptions spread around the internet keep you from exploring binary options, especially because there are so many potential benefits associated with trading them. They are fun to trade, easy to understand and provide an opportunity for you to profit from price fluctuations in multiple global markets. Plus, you can trade in a defined-risk environment where you can never lose more than you initially put into a trade.

Interested in more information? Learn more about the advantages of binary options trading with Nadex.

Disclaimer: Trading on Nadex involves risk and may not be appropriate for all. Members risk losing their cost to enter any transaction, including fees. You should carefully consider whether trading on Nadex is appropriate for you in light of your investment experience and financial resources. Any trading decisions you make are solely your responsibility and at your own risk. Past performance is not necessarily indicative of future results. Nadex is subject to U.S. regulatory oversight by the CFTC.

See more from Benzinga

TODAY
After losing 210 pounds, 1 mom has 4 pounds of excess skin removed. See the results.
Kristi Ledgerwood was diagnosed with type 2 diabetes and lost 210 pounds with walking, low-carb diet. She had skin-removal surgery to remove loose skin after weight loss.
AFP
Asian markets mostly rise as US data boosts rate hopes
Growing hopes that the Federal Reserve and other central banks are close to cutting interest rates helped push Asian stocks higher Friday.The European Central Bank is expected to cut its rates in June.
TODAY
Why Apple's new iPad commercial sparked near instant controversy and outrage
Why are people up in arms about a new iPad commercial? Explaining the controversy and why people are upset for the hydraulic press crushing creative tools.
AFP
Einstein and anime: Hong Kong university tests AI professors
Using virtual reality headsets, students at a Hong Kong university travel to a pavilion above the clouds to watch an AI-generated Albert Einstein explain game theory.While initially hesitant, most Hong Kong universities last year allowed students to use AI to degrees that vary from course to course.
NBC News
Miss USA’s resignation letter accuses the organization of toxic work culture
The Miss USA who gave up her crown and title this week accused the pageant’s CEO of failing to take an incident of sexual harassment seriously and creating a toxic work environment, according to a copy of her resignation letter obtained Thursday by NBC News.
Reuters
Philippines says U.S., China eyeing mining opportunities, especially in nickel
Numerous countries including the United States and China have expressed interest in collaborating with the Philippines for mining opportunities particularly in nickel, its environment minister said on Friday. Maria Antonia Yulo-Loyzaga in a speech said the Philippines should enhance its nickel processing capacity, a key component for the production of batteries in electric vehicles. "Unfortunately, the country currently has only two nickel processing plants, which highlights the need for specific measures to be taken that the administration," said Loyzaga, whose ministry also oversees mining.
AFP
Pandemic agreement talks go to the wire
Hectic last-ditch talks aimed at striking a landmark global agreement on handling future pandemics rolled into the final day on Friday with a deal still up in the air.Such NGOs fear that any agreement concluded on Friday would be rushed, may not change the status quo, and may even entrench some of the weaknesses exposed by the Covid-19 pandemic.
AFP
Slain Australian surfers' bodies arrive in US on journey home
The bodies of two Australian surfers murdered in Mexico were taken to the United States on Thursday to be delivered to their relatives for the long journey home.The body of their 30-year-old American friend Jack Carter Rhoad, who was also murdered, was in the care of another funeral company.
AFP
Afghan women struggle under male guardian rules
Since the Taliban returned to power, Afghan women have been barred from going on long trips, travelling by plane or entering government buildings unless they are accompanied by a man.But Afghan women are still barred from doing so.
CNN
Victory Day celebrations mask simmering tensions inside Putin’s Russia
Since Russia launched its invasion of Ukraine, the military parade has been downsized — this year’s featured only one tank as front-line priorities take precedence.
CNN
Remembering Jack Quinn, former White House counsel but more importantly a good man
Jack Quinn, former White House counsel and powerhouse Washington, DC, lawyer and influencer, passed away Wednesday at the age of 74.
USA TODAY
From dust devil to gustnado: Terrifying (and fascinating) tornado terms you should know
There's a whole special vocabulary dedicated to describing tornadoes, their risks and related weather phenomena. Here's some key definitions.
CNN
UNRWA to close East Jerusalem headquarters after arson attack by ‘Israeli extremists’
The United Nations’ agency for Palestinian refugees will shutter its East Jerusalem headquarters after the compound was set on fire by “Israeli extremists” while staff were inside, its chief said Thursday.
NBC News
What you missed on Day 14 of the hush money trial: More Stormy Daniels testimony, new witnesses and Trump's office habits
Judge Juan Merchan issued two rulings against Trump involving the gag order and a mistrial motion after the court heard from Daniels and three other witnesses.
NBC News
Maine man sentenced to 27 years in machete attack on NYPD officers in Times Square
A Maine man who attacked three New York police officers with a machete in Times Square on New Year’s Eve in 2022 was sentenced to 27 years in prison Thursday, federal prosecutors said.
NBC News
Trump's lawyers imply Daniels' work in porn industry undermines her testimony
Adult film star Stormy Daniels returned to the stand in Donald Trump's criminal trial Thursday, pushing back during cross-examination against his defense attorney's attempts to discredit her in sometimes bizarre and uncomfortable exchanges.
CNN
Arizona State University dismisses scholar after video shows him verbally attacking a woman in a hijab
A video showing a confrontation between a man and a woman wearing a hijab during a pro-Israel rally at Arizona State University is further highlighting the roiling tensions on college campuses across the US over the Israel-Hamas war. Here are the latest developments:
USA TODAY
Cat-sized and hornless, this newly discovered deer genus roamed the Dakotas 32 million years ago
Researchers published findings that show a new deer genus that would have been the size of a house cat, according to the National Park Service.
Politico
Facing Hill pressure, tech group kicks out TikTok
NetChoice, a right-of-center tech lobbying group, dumped the video app following scrutiny from GOP leadership on Capitol Hill.
TODAY
What does a heat rash look like? How to identify and treat it
Heat rash is a common skin problem in the summer. Here are remedies to get rid of heat rash fast, plus what heat rash looks like and common symptoms.

Latest Stories