Forex vs. Binary Options

Difference between Forex and Binary Options

On many forums available on the internet, inexperienced investors ask the difference between the forex and binary options. If users can often see advertisements on these types of investments, they do not yet have any connection between them. For a gardener, this would compare apples and pears. After comparing the binary options with conventional options, here's a new comparison.

Differences

To enable you to understand the difference, we will return to the definitions of the two:

• Forex (short for "Forex Exchange" ) is a market. An investor who deals with the "Forex" is active in the foreign exchange market only (euro/dollar ...). It can directly invest in the underlying asset (EUR/USD, ...), or invest in derivatives (options ...). It may even possibly deal with binary options they have for the conditions underlying currency!
• Binary options are a type of investment : they are available on different underlying (Forex, commodities, equities) and help create an important leverage and can generate very attractive returns. It is a derivative whose value is the underlying derivative. Note that in most cases, you can not exit a position binary options (it takes maturity, also known as "maturity").
  
  

Distinction and Main Advantages for Binary options vs. Forex

1. Possibility of treating more assets (Forex, but also commodities, equities...)
2. Limited losses to the capital invested (not more as Forex)
3. No safety margin blocked broker (Forex: 20% of the account is blocked)
4. Many types of investments: Binary Options (High/Low, One Touch, Zone,...) and Forex (limit order, stop, trailing spot, one-cancel-the-other "OCO" )
5. FOI: binary options customization with the "option builder"
6. No commissions for binary options (Forex: Committee proportional to the order)

Conclusions : As seen above, binary options have a significant number of advantages reports to Forex. Above all, there is the ease of the product, which is simply to predict the direction of the market over time, which yields at maturity are fixed from the start, and the risks are very limited (to invested capital). For beginners in trading, so this is the best compromise between these two types of investment. You will find on this website different platforms for forex trading.

Convergence of regulation for Forex and Binary Options

In recent years, a large number of binary options brokers have seen obtain operating licenses from financial market regulators, which allowed them to develop offers more credible. Before considered a "casino", binary options are now recognized as an investment category in the same type as the Forex, indices or ETFs.
Many of the brokers (all of those in our survey) made ​​an application to European regulators, but it takes a long time to be processed and validated. With a relatively young market (binary options have 4/5 years), it is obvious that it can not be completely controlled, and requires several years to be perceived as legitimate as Forex. Nevertheless, investors wishing to place orders on regulated binary options sites can of course do it.