Binary Option Brokers

Selecting binary option brokers is crucial before going to trade binary options.  It is recommended to research some of the more well known binary option brokers by searching online.  The type of thing to look out for are negative messages posted in forums about:

1. The amount of time it takes for binary option brokers to pay for winning trades.

2. Which binary option brokers are regulated.

3. The amount of return promised by the binary option brokers for selecting positive binary option trades.

There are a number of sites who operate independent forums specifically tailored to the needs of new online binary traders.  On these sites it is easy to find reviews about a number of binary option brokers.  Usually, traders only tend to complain when they do not receive payment.  Therefore if there are no negative comments about specific binary option brokers, it is pretty safe to assume that payouts are met in a timely manner.

In the summer of 2012, the Cyprus government began to regulate binary option brokers.  This is under the watchful eye of the Cyprus Securities Commission (CySec).  Binary option brokers who are regulated will display their relevant credentials clearly on their website.  It is rare for binary option brokers to display credentials if they are not regulated, but verification can be made with the Cyprus Securities Commission.

Most binary option brokers give a return for winning binary option trades between 71% and 89%.  The industry average found across a number of binary option brokers is around 81%.

It is also important to bear in mind that most, if not all, binary option brokers also act as the market maker for binary option trades.  This means that there is no third party on the other side of a specific trade and that the binary options broker is acting as ‘the house’ when executing binary option trades.

Most binary option brokers also offer what is referred to as a ‘sign up’ bonus.  This is an additional incentive to entice traders to choose their binary option trading platform.  The sign up bonus should not be the only thing to attract new binary option traders.  New traders are encouraged to research and check to see which binary option brokers have a good reputation based on all of the above criteria.

New traders should also look out for information published by binary option brokers.  Daily reviews, market performance and outlook should be a free service provided to binary option traders by all binary option brokers.  NEVER pay for this information.  It is a FREE service.

Euro Shoots to 14 Month High Against The USD

January 30th – amidst speculation that the Federal Reserve is indicating a policy change to it asset-buying program, the USD dropped against the majority of the top traded currencies at close yesterday.  It is now expected that the Fed will make a substantial injection into the US financial system.  Despite the Dow Jones Industrial Average reaching a 5 year high, the USD still failed to pull back against most major currencies.  The awaited FOMC statement is also drawing a baited breathe from the investment community.

Despite the bullish trend currently seen in the NASDAQ, it closed yesterday without change.  It is expected to rise to the 2,780 level.

Also the price of Gold increased by 0.50% and finished the day at $1,663.00 per ounce.  The basis of this was speculation that the Federal Reserve is to widen measures on the US stimulus and in turn, cause the demand for gold to increase.  Indicators suggest that Gold will sustain the support level of $1,657.0.  If this for some reason, does not happen, Gold will probably drop to the $1,646 level.

Crude oil also reached a 4 month high and closed yesterday at $97.35 a barrel.  This is mainly an optimistic call based on the growth of the US economy.  However, actual growth has only been seen in the drop in unemployment and no real change has occurred in the economy.  Supporting this bullish trend is the RSI indicator.

The Euro peaked at a 14 month high against the USD based on the recovery plans set for the Eurozone.  The USD/EUR is still currently trading upwards.  As long as trades are above 1.3430, the pair is expected to remain bullish.  Jens Weidmann, President of Deutsche Bundesbank is expected to make an announcement later today.

The GBP/USD is also showing a bullish trend, trading above the 1.5710 support level with the possibility of reaching its 1.5820 resistance level.  If the resistance level is not exceeded, there is fear that it may drop to 1.5700.

One of the major currencies gaining on the USD was its counterpart the CAD.  Seen as a bear trend, it will remain this way while the pair will trade below the 1.0060 resistance level.

Google, Facebook to Rise in Wake of Mobile Spending

When the shift in advertising started to drift from offline to online, there was no shortage of online inventory.  As online advertising developed, the focus came down to ROI for advertising dollars spent.  Suddenly, marketers were able to measure performance in a way never seen before in the world of offline advertising.

Over time, the price of online advertising steadily rose as the demand increased.  Advertising networks, affiliate programs, pay per click traffic and SEO (search engine optimization).  The budgets to be seen online seemed to be endless.

Now we are entering into another shift.  This time advertisers are looking to reach mobile smartphone users.  Google, Facebook and a whole array of mobile advertising companies have already entered this market to provide advertising solutions to the companies with mobile advertising budgets.

According to Gartner, mobile advertising will increase 18.8% to $11.4 billion in 2013.  The total spend on mobile advertising in 2012 was $9.6 billion.  The prediction is expected to reach a peak in 2016 of $24.5 billion.

The effect that we will see from this is the share price of companies whose core business is application development, advertising networks and platform providers.

However, the adverse effect will be decreased spending in advertising in other more traditional media such as newspapers and printed publications.

Gartner is also predicting that although mobile search will continue to be the driving force during the period of this forecast “mobile display ad spending will grow and take over from mobile search”.

Consumers are spending more time on mobile devices and thus creating the demand for mobile advertising inventory quicker than they can physically re-allocate their advertising budgets.  Due to an excess of unallocated advertising space on mobile, application developers have been spending on mobile ads to increase exposure to their applications, a process known as ‘paid discovery’, while the unit prices for mobile advertising have remained relatively low.

Once the larger companies have the time to re-align their budgets, the cost of mobile advertising will soar.

This will result in the share price increase of Google, Facebook and a decline in shares such as Lamar Advertising who provide offline advertising.

Iran Bars Oil and Gas Exports to EU

In yet another snub against the west, Iran has banned crude oil and gas exports to the 27 countries forming the European Union. The ban comes as no surprise as the EU had already previously begun to boycott imports of Iranian commodities in order to impose sanctions over Iran’s nuclear program.

The announcement, which came earlier today, is a symbol of retaliation against the EU and is currently unclear whether this will have any meaningful effect.

Speaking in Tehran, Ali Reza Nikzad Rahbar, spokesman for the Iranian government stated “The Iranian ban will remain as long as hostile decision are made by the EU”. The story was broken by Fox News.

Before the ban was implemented last year, the sale of oil to the EU bloc counted for approximately 18% or Iran’s oil sales.

The rise in Crude Oil has seen a rise of 5.42% over the past month.

Earlier today, unconfirmed reports were circulating about an explosion in Iran’s Fordo uranium enrichment facility. The report quotes unknown Iranian sources but as yet, has not been corroborated.

World Currency Roundup January 23rd 2013

The UK has reported a surprise decline in unemployment which has now become the main reason for the GBP sterling to strengthen its position against the USD.  Gaining 0.2% to $1.5874 just before 10am GMT today.  It also reflected positively against the Euro by advancing 0.1% to 84.03 pence to the Euro.

Japanese Yen has also risen for the third consecutive day against the USD.  This has been the longest successive rise in a little under two months.  This comes from speculative talk from the Bank of Japan on implementing a plan for economic growth.

Compared to all sixteen of the other major currencies, the YEN has stayed strong.  The inflation target increased yesterday to two percent.  As of 06:27 New York time, the YEN was valued 0.4 higher at 88.33 against the USD.  Over the past three days the YEN has gained 2%.  It also strengthened against the Euro by 0.3% to 117.82 per Euro.

The South Korean won, which has been the best performing currency of 2012, has also shown a sharp decline.  Bahk Jae Wan, Korea’s Finance Minsister stated that the Korean government is “all ready” for new measures.  Speaking to journalist in Seoul he would not give any details of these measures would be implemented.  Lowest point for the won was January 15th when it dropped to 1,054.49, the lowest since August 2011.  Overseas investors have also been selling Korean holdings more than buying.  This has also attributed to the decline in the won.

The economic growth forecast for South Korea was cut by Goldman Sachs from 3.4% to 3.1% earlier today.

After a two day increase the Australian Dollar AUD also fell after based on published data showing that consumer prices increased in the last quarter of 2012.  A drop in the interest rates against loans is an expected outcome.  Measured against the major 16 currencies, the AUD dropped in comparison to all but one.

The Australian dollar drop was measure at a 0.3% decrease to $1.0538.  It also fell 0.6% against the Japanese Yen to 93.21.  The chances that the Reserve Bank of Australia will decrease its key rate to an all-time low of 2.75 in February is 47%.

Google Shares Rise Despite Decreasing Average Cost Per Click

In a recent earnings call, despite a drop in the average cost per click for advertising on the Google network, the search engine giant has prevailed and shown good results.  Analysts stated this was mainly due to adding a new product listings search feature at the end of 2012 and reaching more international markets.

In stock news, the reported net revenue was up from $8.13 billion to $9.83 billion a year later.  A poll taken among Reuters analysts had under predicted the forecast at around $9.6 billion.

Business from international markets was reported to have risen 23% in one year whereas the growth in the 3rd quarter was only 15%.

One of the key performance indicators to measure Google’s performance and plays a big part in the valuation of the stock is the average cost-per-click.  Despite an increase from the 3rd quarter the average CPC had fallen 6% from the previous year.

The fall in the CPC was mainly due to the increase of consumer using mobile smartphones.  Advertising for smartphones using Google’s advertising platform provides advertisers with lower rates than on the web based ad network.  This also shows that advertising money is beginning to shift to mobile advertising.  It is still difficult and too early to measure the effectiveness of mobile advertising on the Google mobile network.

Last year saw Google acquire Motorola Mobility.  This was the foundation of Google’s move into mobile waters.  However, Motorola Mobility reported yet another quarterly loss.

In a recent interview, Google CEO, Larry Page stated “We now live in a multi-screen world, we feel naked without our smartphone.”  Despite the non-profitable Motorola Mobility, Google is continuing to focus on mobile smartphones.

The reported net income, in other stock news, for the fourth quarter was $2.89 billion which translated to $8.62 per share.  The figures for last year were $2.71 billion and $8.22 per share before the Motorola acquisition.

Despite mobile click prices making the average CPC decline and adding pressure on the share matrices, it is thought to be only a matter of time that the mobile CPC prices will rise in-line with a higher demand for mobile advertising space.

The operating loss reported for Motorola Mobility during the quarter was $353 million.

Patrick Pichette, CFO of Google predicted more turbulence with Motorola’s financial results in 2013 while efforts are made to restructure Motorola.

Google also announced a plan to off-load the Motorola Home television set top box business to Arris Group Inc.  The price of the deal is set at $2.35 billion. Additional development will focus on a smaller range of products for the mobile phone industry.

Google share were on the up around 5% to $738.20 in Tuesday’s after-hours trading.

Betting On Binary Options

binary_options_up_downNot to be confused with real trading, Binary Options offer ‘traders’ all the fun and excitement of playing in a casino.

Following a stock trend for months, or reading in-depth reports on commodities and currency movements, probably won’t guarantee that a deal transacted in a Binary Options platform will move in your favor.  It will, however, give the basis of, at most, an educated guess.

Next week Facebook will report its earnings.  January 30th to be precise.  On the outcome of that call the stock will certainly move.  Now, putting this into a Binary Options trade would mean that a trader needs to guess the outcome of the price of Facebook within an allotted time.

Most Binary Option platforms start at 60 seconds and go up to one hour.  For example, the price of Facebook is 29.66.  The Binary Options trader simply bets if the price will move up or down at the end of the allotted time.  The connection to any real data in reference to the stock is usually irrelevant given the nature of traded stocks.  Even if a stock is performing well in a 24 hour period, does not necessarily mean that it will not go down for a few minutes during that 24 hour period.  That is exactly where Binary Option platforms make their money.

Most Binary Option brokers are usually also the market maker.  Much in the same way that all bets lost in a casino go to the house.  Similar to casinos, Binary Option trades do not have to be transacted only when there is a buyer and a seller.  If a trader bets that a stock will go up, the operator will take the bet and cover the payout.

If, however, a trader places $200 on a stock, commodity or currency to rise and the payout is 81%, then when the deal closes according to the prediction of the trader, the trader wins $162 on top of their $200 bet.

The biggest difference and the reason why Binary Options is so risky is because the deal closes at the allotted time.  This means it cannot be extended and only rarely, and with a penalty, can a deal be closed before time.

For more information about Binary Options, checkout our Binary Options page.

Banks to Cut Down On Commodities Due to Tighter Regulation on Wall Street

In an eight year low, Goldman Sachs how decreased its risk in commodity investment.  This signals the tightening regulation imposed on Wall Street.  Up until now Goldman Sachs has been the biggest bank measured by commodity revenue.

In an announcement yesterday, the bank stated that under the new “Value at Risk” ratio, Goldman Sachs could have made a $22m loss per day.

Used to measure potential loss, and one of a just a handful of public indicators, the VAR  (Value at Risk) has become a common industry measurement used to determine

This signals a drop across the board of Wall Street banks in risk taking commodities and has come about due to harsher regulation.

It could also be that price volatility has fallen from a lower Value-At-Risk.  Back in 2009, VAR levels were lower, but commodities still profited.  Harvey Schwartz, the new CFO of Goldman Sachs stated “virtually all the drop in the bank’s VAR – not only in commodities – in the last three months of last year reflected the decline in market volatility”.

There has been a significant drop in revenue from commodities industry wide.  Around $10 to $11bn last year has dropped from a peak between 2006 and 2008 of around $16bn.  The arrival of more banks in the commodities market was the key factor which reduced commodity revenue per bank.

Now that there has been such a significant drop in profitability of commodities, a handful of banks including RBS, UBS and Crédit Agricole have made a conscious decision to abandon their hold on the commodities market.  Meanwhile, some banks such as Barclays and Deutsche have just sized down their commodity investments but have not left the market completely.

 

Forex News 17th January 2013

European Central Bank Expects Recovery in 2013

Following the release of the European Central Bank’s monthly bulleting, the following conclusions can be made:

  1. In 2013 the European economy is set to recover, although it may not be until the second half of the year.
  2. Inflation is likely to decrease to under 2%.
  3. Trading in the Euro will increase.

Despite the relatively upbeat announcement, they have hedged their bets (no pun intended) by adding that there is still the risk that the economy will remain on the downward slope how it ended 2012.

The main factors quoted for the rise are the accommodative monetary and a very clear indication that confidence has increased in the financial market.  The road to recovery is far from short but the ECB also have expectations that demand on international export will and play a major part in the recovery.

The report also offered good news regarding inflation, with a decrease to below 2%.

The gross domestic product will attract attention for the result from Q4.  As inflation dropped in December 2012 to 2.2%, it will be a simpler task for the ECB to make firmer decisions on monetary policies.  Even a small sign that the battered Euro zone is recovering would be a positive outcome for the Euro.

Despite the positive bulletin, the Euro still traded slightly below 1.3350 against the USD in the foreign exchange market.  German’s Economic Minister, Roesler stated that ‘Germany won’t accept a weakening Euro and will pay the price to save the single currency.

Currently, Germany sits as one of the strongest economies in Europe and will fight to maintain a steady price on Euro trading.

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