Is Trading Binary Options a Form of Gambling?

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The answer is not clear cut. So the answer is not black and white. A hedge fund manager buying a large chunk of shares in a multinational corporation has an element of risk to it. Any form of financial disaster could impact that company. The manager is hopefully aware of this, but is satisfied that the potential gains are worth the risk. That would strike me as a gamble. So if we have established that it is possible to gamble in traditional share trading, it is certainly possible in binary options.

But just like the hedge fund manager above, it is also possible to trade based on expected value. In my opinion, once a positive expected value has been established, the line has been crossed from gambling to investing. Firstly, there is nothing wrong with using binary options for a flutter, as long as you know that is why you are using them and are not gambling with money you cannot afford to lose.

That applies equally if you are using them to trade really! Binary options offer a quick, exciting way to speculate on the markets and are probably more entertaining than some other forms of betting, so why not? Some of the platforms are designed with gambling absolutely at the forefront of the design — flashing lights, pulsing price graphs and competitions. People who use binaries for a bit of fun are well catered for.

If however, you want to avoid using them to gamble, there are a couple of checks you can make, based do you think binary options is like gamble your own trading:. So whether binary options are gambling do you think binary options is like gamble not depends on the trader. They can be used to gamble, but they can also be used to invest. It all comes down to what is going on between the ears of the person placing the trade.

Is This Simply Gambling? Is All Investing Gambling? Are binary options gambling?

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At its heart, trading binary options online can be seen as a form of skill gambling. You are risking money by predicting an outcome in a period of time. I guess you can relate it to roulette, but less complex. In roulette you bet on black or red and if the ball lands on either one at the end of its spin you win. You can see the parallels in binary options trading online.

You bet if the price of an asset will rise or fall below its current price in a certain time period and you either win or lose. It can be as high or low risk as possible so as long as you are careful then you can have fun. However, despite the similarities, binary options are not considered gambling by governments.

As such, any successful trading is considering earnings and not winnings and therefore any money earned is usually taxable. We advise anyone considering trading in binary options online to seek advice from an accountant in order to ensure that these earnings are claimed by the end of the taxable year.

One of the main reasons it considered earnings rather than winnings, is because of the skill involved in trading. Buts there are plenty of financial tools available to help the astute trader make informed decisions so you minimise risks or at least choose the level of risk comfortable to you.

Ready to start to trade binary options online? Learn how to lower you trading risks with the right binary options strategy. We cover the basics and advanced trading strategies. Know when to bet with the latest market hours, global economic calendar and free e-wallets for fast and secure deposits. We use cookies for your improved experience. By using our site you agree to the use of them. Yes At its heart, trading binary options online can be seen as a form of skill gambling.

More binary options insights Best binary options brokers 10Trade Review. Best Binary Options Brokers Ready to start to trade binary options online? Binary Options Strategies Learn how to lower you trading risks with the right binary options strategy. Free Financial Tools Know when to bet with the latest market hours, global economic calendar and free e-wallets for fast and secure deposits.