What are binary options and what should you look for—and avoid—in a provider? Here’s a rundown.

While some traders instantly think “scam alert!” when they hear the words binary options, the truth is that binary options can provide excellent and profitable trading alternatives for volatile and nonvolatile markets. The key is choosing a good binary option provider. I’ll begin by looking at what binary options are and then offer a few guidelines on how to choose the best binary option provider.

Binary options are short-term expiration contracts with limited risk and profit opportunities, based on either a yes or no proposition. They are less complicated to trade than futures or forex because you either agree (considered a “buy” opportunity) or disagree (considered a “sell” opportunity) with the strike statement. Most binaries have a maximum payout of $100 and the risk is limited to the premium paid on entry.

Download the Stock & Commodities article by Gail Mercer, “Choosing a Binary Option Provider“. Stocks & Commodities V. 34:11 (26–29): Choosing A Binary Option Provider