In one of our previous articles, we discussed the features of OTC binary options trading. Today, we’re going to talk about one of the most famous options exchanges – the CBOE.
We’ll tell you about its history, analyze its features and, most importantly, find out whether you can register to trade binary options.
What is the Chicago Binary Options Exchange?
The CBOE was founded in 1973 and is a subsidiary of the Chicago Board of Trade, the world’s largest commodities exchange. Today, the Chicago Board Options Exchange (CBOE) accounts for more than 51% of all options trading in the United States and 91% of all index options. To make this clearer, let’s go into more detail.
On the first trading day in the history of the CBOE, 911 orders were opened for 16 assets. Today, more than 1 million transactions are carried out daily.
The exchange offers trading options on the following assets:
- More than 2,200 company shares;
- 22 stock indices;
- 140 index funds.
Below are some more CBOE resources, and then we’ll look at the trading resources:
- 90% of transactions are carried out digitally and account for around 60% of turnover;
- In 2008, annual turnover exceeded 1 billion contracts for the first time;
- Trading participants are market makers and brokers who trade on behalf of investors;
- The Chicago Binary Options Exchange allows you to trade options on the most popular stocks and indices, such as the S&P 500.
How to trade on the CBOE
Several brokers work with the CBOE. But these are not the companies that make binary options trading possible. Neither are Binary or 24Option. You may never have heard of these brokers. In fact, there is a list of brokers where you can register directly with the exchange. But there are a number of nuances that make it almost impossible to trade options:
- The American Exchange does not yet work with CIS traders. This is the main reason why we have to settle for binary options brokers;
- Binary options are not offered in the way we are used to. The CBOE offers various types of options, but you won’t find anything like what you see on Binomo and others like it. To make money on the stock exchange, you’ll have to learn other ways of trading;
- Considerable investments are needed to get started. On the websites of the brokers we’re used to, you can make transactions with investments of 10 dollars (or even less), while on the stock exchange you may need several hundred dollars.
To start trading on the stock exchange and make money at the same time, you need a great deal of trading experience and a considerable amount of capital. Would this be the case for you? If so, you can try joining the Chicago Binary Options Exchange or through a platform. Let’s first find out what’s most worthwhile.
Benefits of trading on the stock exchange
Professional traders who trade large sums of money by our standards don’t usually stay long at traditional binary options brokers. They no longer care about details such as the demo account and the possibility of making deposits and trades with little money (which are the main advantages for novice traders). These more experienced traders are more concerned with other details, which we’ll go over now.
No fraud problems. Trading is real here. Trades are made between speculators. Therefore, the broker doesn’t care whether you make or lose money and no one will interfere with your operations.
In addition, operations are regulated by the US government. This is certainly more relevant than a license issued by the regulatory body in Vanuatu, for example.
Reliability and integrity are the main reasons why professional traders choose to trade on a real exchange.
You can also note as an advantage the opportunity to receive unlimited earnings. The level of profit depends solely on the trader’s skills and the financial resources allocated.
Chicago Stock Exchange or binary options brokers?
We’ve looked at the main features of stock market trading and we still don’t recommend delving into this subject, because, firstly, it can be a bit more complex. Secondly, it’s unlikely that you’ll ever be ready to compete with professional traders. But we hope we’re wrong in these assumptions. Next, let’s try to figure out where it’s best to trade: at a binary options broker or directly on the stock exchange, from the point of view of an ordinary user rather than a very experienced trader.
Initial amount to start with. As we’ve already noted, to start trading on the stock exchange, you need a considerable investment, and not everyone has or is willing to invest thousands of dollars in speculative trading.
On the other hand, the minimum deposit on the websites of some binary options companies is just 5 to 10 dollars. But don’t forget that the profit potential depends a lot on the amount of the deposit. With very small deposits, you won’t be able to make any real money even on these types of platforms.
These binary options, to which our site is dedicated, allow you to start with a relatively low investment, making them ideal for novice traders.
Accessibility for private traders. The CBOE only works with brokers and market makers in the USA and is not yet available to us. And it is not known when this situation will change.
In the meantime, Binomo and other reliable platforms are available for registration. Some of them don’t work in Brazil or aren’t accepting new clients. But there are enough companies that offer options for beginner traders. So you definitely won’t have any problems finding an ideal trading platform.
Reliability. Yes, any exchange is more reliable than a binary options broker. But that doesn’t mean that by trading with these brokers you will necessarily fall victim to scams.
Certainly, even a relatively good company won’t be able to resist making life difficult for a trader who has invested a few tens of thousands of dollars. Firstly, it’s important to note that not everyone can invest such a sum, and only a very fraudulent company would be willing to cheat against very low amounts. Secondly, the most popular and well-known companies allow you to work even with these lower deposits.
The Chicago Binary Options Exchange is not available for beginners. But that’s usually not necessary. You can easily find a reliable broker with fair trading conditions. However, we’re not saying that you should avoid taking this step, because once you’ve become a successful trader, this is probably where you’ll continue your career.
