The development of binary options brokers
In the area of banking and investments, Sharia law strictly forbid the lending of money with interest. When Sharia law is applied to Binary options trading, this means interest that is earned or charged for an overnight position is prohibited as well. In the spot financial markets, trading is done on a 24 hours basis. By 5 pm New York time, all open market positions are then rolled over to the next 24 hours cycle.
This situation puts Muslim traders on a collision course with their religious beliefs. For example, instead of having an open market position rolled over automatically making overnight interest payable, open positions in Islamic trading accounts are closed by 5 pm New York time and then reopen immediately hence avoiding any interest payable for the fresh 24 hour cycle.
To help traders in their selection of brokers that offer Islamic trading accounts, we have compiled a list of leading binary brokers that offer Islamic trading accounts.
However, ever since a range of these were created with standardized features, and subsequently listed on a number of exchanges, the volume of them being traded has grown significantly. This development also led to many more brokers including binary options in their range of products. Although this is largely a good thing, it can make it more difficult to decide where to trade. That is why we have compiled the above list, to make it easier for you.
We have also provided some additional advice on deciding where to sign up below. Every trader has to make a decision about where to trade, and it isn't a decision that should be taken lightly. There is a huge range of online brokers on the web and it can be tough to know which broker is the best one to use.
There is not really a single broker that could be classified as the best because, a broker that might be suitable for one trader is not necessarily going to be suitable for you. This is precisely why it's important to choose the right broker, and why at OptionsTrading. This is something we have put a great deal of effort into doing and we have carried out extensive research into a large number of online brokers.
This particular page is focused on the best online brokers for trading binary options, as per the recommendations we have listed above. In our opinion, there are some specific factors that traders need to take into account when deciding which broker to sign up with because, these options are quite different from thd other types of options. In particular, we believe that anyone trading binary options should take the following three things into account before selecting an online broker to join:.
Binary options are known by a number of different names, one of which is the "all-or-nothing" options.
This name is appropriate because, technically, trading a binary contract will basically result in one of two outcomes — if it expires in the money then you get paid a return and if it expires out of the money then you get paid nothing. As we have already mentioned, the simplicity of this method is one of the reasons why this type of trading has become so popular.
By this time, the subprime mortgage crisis had begun to play out with the collapse of real estate prices. The Options Clearing Committee OCC , which had been created in the early 70s to develop the regulatory framework for the options markets, proposed changes that would see binary options elevated to the status of a financial asset that could be traded on its own in the major exchanges. By early , the US Securities and Exchange Commission SEC accepted the recommendations of the OCC and made it legal for binary options to be offered on major exchanges as a stand-alone, tradable financial instrument.
The advances in information technology which has seen the advent of trading software that have been deployed for online use as well as mobile versions of the trading platforms, have seen an explosion of binary options trading.
There is a lot more flexibility now. No longer are traders restricted in terms of where to trade or the type of options to trade. Traders can now trade both call and put binary option types , trade a plethora of financial assets across several markets, and can now trade binary options on the go with their smartphones. In addition, many more trade varieties have evolved, with traders now being able to trade binary options in three different ways.