Since its inception in 2008, binary options trading has changed the entire face of online trading. Over a short period of time, this form of trading has spread like wild fire and has quickly become a global phenomenon. Despite this growth, there is still some widespread skepticism about future and options trading in India since it is not regulated by Indian monetary authorities like the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). The good news is that even though these limitations exist, if you are an Indian resident, you can still trade in options through other registered and regulated international brokers. This will enable you to enjoy the flexibility of fast trading with predefined profit and loss ratios. With very low initial investment requirements, you can kick start your trading career without risking your lifetime’s earning. There is only one golden rule of thumb though – ‘trade wisely without getting greedy’.
Has India Legalized Binary Options Trading?
Binary options trading is about investing money in the options market. There are several countries where this market is regulated by the monetary authorities of those respective countries. For instance, in Cyprus, the CySEC or Cyprus Securities and Exchange Commission overlooks the financial transactions and activities in the country in order to ensure that no fraudulent activities take place and that investors’ interests are safeguarded. Similarly, in the United Kingdom, the Financial Policy Committee and the Financial Conduct Authority are responsible for regulating the options market. Coming back to India, no monetary authorities like SEBI and RBI have regulated the options market in the country and neither have they banned this form of trading in India. This, therefore, allows Indians to trade in the binary option market and to invest money with peace of mind.
How to Select the Best Binary Options Trading Broker in India
It is important to remember that although there are currently no brokers operating from India who are regulated by local authorities, trading with other international brokers is safe to do especially if these brokers are regulated by other regulating authorities. The fact is options trading is always risky because the odds of losing a trade are always present in any given trade. You do not need to add to this risk when selecting a broker to partner with. Since the options market in India is not regulated, chances are high that some brokers will try to take advantage of the situation. To avoid any issues or scams, it is best to opt for a reputed and regulated broker and in this way, the only risk you face is that of losing a trade and not because of any fraudulent activities. You can either contact a broker directly to check if they are regulated or you can check online for this information.
Once you have located a reputable broker, you can then look at the other services and features they offer which will help you to trade binary options more effectively.
Trading Interface and Trade Options
An important element of trading effectively is the trading interface. Most brokers offer a 100% web-based platform which means that you will not need to download any software. With only your computer and internet connection, you could be trading within minutes. Take the time to check that the trading interface is easy to navigate and to use since online trading often requires quick thinking and action. Most brokers also offer a selection of trade options to trade in such as the standard binary options trade option, 60 Seconds, One Touch, Options Builder, Pairs and more. The advantage of having access to these different trade options, is that it provides you with flexibility and choice in your trading.
If you are new to the world of online trading, you should select a broker that offers a demo trading account. This type of training account allows you to practice trading in a real trading environment without the risk of losing any real money and the benefit of this, is that it gives you the opportunity to familiarize yourself with the trading interface before you trade for real money. Many brokers offer the demo account for free while others require a trader to first open a real trading account before they will allow you to use this facility, so make sure to check this with the broker.
Most brokers offer a wide selection of assets to trade in. That is, examples of options trading in India include trading in stocks such as Apple, Microsoft, Coca Cola etc., indices such as Dow Jones, Nasdaq, ASX etc., commodities such as, Gold, Silver, coffee etc. and currencies such as, EUR/USD, AUD/USD and many more. Remember that in order to trade effectively, it is always best to trade in an asset that you have some knowledge of and many brokers also offer assets related to the Indian market such as the stocks of Tata Motors, which is the largest manufacturer in the Indian automotive industry.
It’s All About the Money
Trading is all about making money and when you trade options in India, it is no different. The first thing to take into consideration is that most brokers offer trading in major currencies such as the US Dollar or the Euro. Since the local currency of India is the Indian rupee, you need to ensure that as a trader, you clearly understand the rate of exchange and what it will cost you to trade. Trading safely involves trading with money you can afford to lose.
Another important aspect to take into account is that most brokers require the trader to make an initial minimum deposit of between $50 and $400 to gain access to their trading platform and to trade online. For some, a low initial investment is important so check the minimum deposit requirement with the broker before you sign up with them. Many brokers also offer a welcome bonus of up to 100% which mean that they will give you a percentage of your initial deposit as a bonus to trade with. So for example, if you make an initial deposit of $100, a broker will give you an extra $100 in your trading account to trade with. While this seems like an excellent perk, these welcome bonuses have strict terms and conditions which often require the trader to trade the balance in their trading account over 20 times before making a deposit. Do not be pressurized into accepting the bonus.
Whether you are new to options trading or a seasoned professional, having access to trading tools is beneficial. Many brokers offer education trading centers which provide their traders with video tutorials, eBooks, daily and weekly market reviews, glossary of trading terms, an Economic Calendar and much more. As a new trader in India, having access to options trading tutorials as well as effective strategies in trading options will help boost your trading success. Most brokers do not charge for any of their trading tools and many also provide one-on-one coaching in trading on their trading platform. Remember that when you select a broker, you need to ensure that they meet your needs as a trader. That is, if you are the kind of trader who likes to trade short-term options, selecting a broker that offers this type of trading option on their trading interface is important.
Options trading in India is quickly increasing in popularity. Very soon, we may see Indian monetary authorities setting up regulation guidelines for the binary options market. This market has untapped potential of unlimited earnings but there are risks of losing too. Assess your risk appetite and make educated decisions. After all, it is your money and you should invest wisely.