Binary options trading has gone from an obscure niche to a hugely popular trading area over the recent years. The central idea is very simple: you make a judgement on whether an index, stock or commodity will be higher or lower at a set time, and get paid if you are right. The ability to trade binary options for Bitcoin is even newer, with new, fully featured exchanges benefiting from the speed, anonymity and no transaction costs which come with using BTC.
There is wide-ranging debate about whether binary options are really trading or just a form of gambling. We’re leaving this distinction out to focus on the practical aspects instead. Below we provide an overview of the top sites to trust with your coins, and follow this with an explanation on how Bitcoin binary options work. We also cover some of the sites where you can make these trades. Finally, for those readers who are new to Bitcoin, we describe some of the key advantages to choosing BTC to trade in.
Take a look at the sites we have reviewed for binary options betting using Bitcoin. Note that while some of these sites accept Bitcoin deposits, they may be just treating it as a deposit method rather than as a way of anonymity. Please read the reviews where we clearly explain this.
One of the main attractions of binary options is that you do not need to be an expert trader to take part. You are offered a range of markets including individual stock prices, currency pairs and indexes like the S&P500. You then choose a price and a time and make a bet as to whether your market will hit that price within the given period.
Here is a simplified example:
You decide that ACME Corp.’s stock is due to go up. You can log on to a binary options platform and bet that the stock will be over 100 points three days from now. Your contract needs to be binary (a “yes” or “no” result). If this stock is >100, you’ll win the agreed price (usually at 1.7-to-1). If not, you’ll lose and will be offered a small return by way of consolation.
You can bet on markets five minutes in the future, and you can make “call” bets (that the result will be a “no”) as well as “put” bets. You are using your knowledge of and insights into the market to make a series of short-term trades, all of which have a yes/no outcome.
The binary options sites make money by offering winning contracts less than they pay for losers. The average spread is 7.5%. This is high compared with other gambling games. However, the balance comes from knowledge of the markets and the ability to be selective with the options you choose.
You can bet on the price of Bitcoin going up or down (usually denominated in USD) as a contract at many binary options sites. You can also deposit your BTC onto the sites and use it to trade in whatever markets you wish to tap into. These can include commodities, forex and every type of stock-based trade imaginable.
While some rough-and-ready sites offer BTC-only trading, it is more common nowadays to find sites which offer Bitcoin alongside a range of other deposit options. This does take away from one of the key advantages, which is anonymity.
There is a long list of sites which have been created to allow BTC binary trades. Here is a selection of those available, ranging from the most basic to the fully featured professional sites.
SatoshiOption is a Bitcoin-powered platform that takes its name from the founder of this currency. This is a clean and simple site, with the main markets divided into the time available – “60 seconds” being the shortest slot and “end of the week” the longest. When markets are open you’ll have several choices, plus you can also take out options on the popular currency pairs and commodities. This site has the advantage that you can create a separate Bitcoin wallet within the programme.
AnyOption is a more fully featured platform. This closes when the markets are not open, and springs to life with hundreds of possible contracts when the markets are live. Stocks are the focus here, although you can bet on numerous other markets including currency pairs and commodities. Check out the “One Touch” feature, which makes things easy for experienced traders.
Whether you personally consider binary options to be trading or a form of gambling, there is little doubt that using Bitcoin for this activity has some advantages. The first one is anonymity. When you trade at a Bitcoin-only binary options site, you will not need to disclose any personal information. With just an email address required to register, there are no annoying requests for backup documentation, making it possible to completely separate trading from your personal life.
The other main advantage is that there are no transaction charges for depositing or withdrawing using Bitcoin. Credit card deposits can get expensive, with charges of up to 5% not unheard of. You can also get hit with withdrawal processing fees when using mainstream currencies. With BTC, deposits and withdrawals are instant and free.
Finally, the Bitcoin community is big on fair play. Provably fair gambling games and a community which regularly highlights scams and dodgy operators are the norm. Make sure you are trading with legitimate binary options sites by trading in Bitcoin.