These days there’s hardly a country in the world that isn’t involved in online trading. It’s a financial practice that’s opened the doors to many who in the past might have had an interest, but not necessarily the financial means. While the procurement of stocks remains a pricey affair, binary trading offers a much more simplified way in which to partake in trading, and that’s because it offers the simplest form thereof. Binary trading is a form of investment that allows traders to predict whether the price of an asset will be above or below a specific value at a certain time. The main advantage of binary trades is that it allows investors to speculate on and profit from short-term fluctuations in the market without having to worry about losing their initial investment. This type of trading is advantageous to South Africans because in addition to being a less cost-incurring affair, it also opens the doors to the various financial markets of the world.
Binary trading means buying and selling of assets such as gold, silver, etc., and more recently, even cryptocurrencies. These assets can be stocks or even indices like the Dow Jones Industrial Average (DJIA), Nasdaq Composite Index (NDAQ), or Standard & Poor’s 500 (S&P 500). The options at one’s disposal are vast, allowing for South Africans to involve themselves in the inner workings of the world’s economies. Should one feel the need to start trading FTSE100 shares on the London Stock Exchange (LSE), then all that’s required is a subscription to a regulated online broker. It needs to be noted that due to the nature of this type of trading, which is in essence speculation, buying shares on the FTSE 100 is not possible, but estimating on the movement of the index market itself or on the share price of one of the companies it lists is possible.
Knowledge is key when it comes to any type of financial endeavour and thus it’s always advisable to do as much research as possible on the subject matter. There are various online resources available in the forms of financial news websites as well as social media platforms where fellow-traders congregate and share tips and applicable information. However, for those seeking a more hands-on approach, a practice account, also known as a demo account, can facilitate such needs. All that’s required is for one to sign up with a regulated broker, the majority of which provide such accounts, and then the practice routine can commence. By way of a demo account, beginners can learn the ropes and get a real feel for how the actual binary trading/speculation gets done while not having to invest their own money. It won’t guarantee success as the volatility of this type of trading means the investment of not just money, but also time. Optional extras, provided by the broker at a fee, includes automated trading software, and it can be helpful if the trader doesn’t always have the time to monitor the various happenings.
In South Africa, online trading or binary options is not illegal, which is why it’s experienced a tremendous upsurge in the last five to ten years. However, the practice is not yet regulated by the Financial Services Board (FSB) of South Africa. What this implies is that South African companies are prohibited from providing such services. But, this is not to say that South Africans cannot partake in binary options trading and instead simply means that they would need to sign up with a broker that is stationed outside of the country. There are numerous regulated online brokers that offer their services to the SA public and those interested in signing up should just make sure that the website has been registered with the FCA (Financial Conduct Authority), the Cyprus Securities and Exchange Commission (CySEC) or any other recognised European license.