Binary Options trading has gone from an obscure niche to a hugely popular trading area over recent years. The central idea is very simple, you make a judgment 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 a wide-ranging debate about whether Binary Options are really trading or just a form of gambling. I have left this distinction out of this article, instead focusing on the practical aspects. First below you will find an overview of the top sites to trust with your coins and then an explanation on how Bitcoin Binary Options work. After that some of the sites where you can make these trades are covered. Finally, for those readers who are new to Bitcoin, some of the key advantages of choosing BTC to trade in are described.
Best Bitcoin Binary Options Sites
Please take a look at the sites we have reviewed for Binary Options betting using bitcoin. Please note that while some of these sites accept bitcoin deposits, they may be jut treating it as a deposit method rather than a way of anonymity. Please read the reviews where we clearly explain this.
How Binary Options Trading Works
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, ranging from individual stock prices, through 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 in the given time.
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 3 days from now. Your contract needs to be binary (yes or no result). If this stock is >100, you’ll win the agreed price (usually at 1.7-to-1) if not then you’ll lose and will be offered a small return by way of consolation.
You can bet on markets 5 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 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 to other gambling games. However the balance comes from knowledge of the markets and the ability to be selective with the options you choose.
Binary Options and Bitcoin
You can bet on the price of Bitcoin going up or down (usually denominated in US Dollars) as a contract at many Binary Options sites. You can also deposit your BTC onto the sites, and use these to trade in whatever markets you wish. 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 among a range of other deposit options. This does take away from one of the key advantages, which is anonymity.
Bitcoin Binary Options Sites
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 which 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 – with 60 second the smallest and end of the week the longest. When markets are open you’ll have a lot of choices, and you can also take out options on the popular currency pairs and commodities too. This site has the advantage that you can create a separate Bitcoin wallet within the program.
AnyOption is a more fully featured platform. This closes when the markets are not open, though springs to life with 100’s of possible contracts when the markets are live. Stocks are the focus here, though you can bet on many other markets including currency pairs and commodities. Check out the ‘One Touch’ feature which makes things easy for experienced traders.
Advantages of Bitcoin Binary Options
Whether you personally consider Binary Options 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 e-mail address needed to register. There are no annoying requests for backup documentation – it is possible to separate your personal life and trading completely.
The other main advantage is that there are no transaction charges for depositing or withdrawing with 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.