Our readers in South Africa sometimes ask is binary options trading same as gambling or are there any differences between these two industries.
To majority of population, binary options trading is still relatively unknown field and they don’t have enough information regarding binary industry. Therefore, they search for more info and check if there are similarities with gambling world.
Here on Binary Options South Africa, we will try to provide our readers a detailed information about similarities and differences between binary options and gambling industry and answer on question is binary options gambling or not.
As stated above, people interested in binary options can see how there are few facts which are alike to gambling, such as risk involved, strategy and excitement during process itself. Besides that, there is a big contrast between those two industries.
For more on is binary options gambling or not, check below in our article.
Is Binary Options Gambling?
To begin with, let us introduce you with several definitions, relevant to this topic.
- Trading – term used in binary options or any other financial sector, which implies an action of entering or closing the position on financial market. Basically, it explains swapping money for a particular financial instrument.
- Gaming – term used for types of gaming activities, approved by law. This is actually legal.
- Gambling – term used as wagering money with an uncertain outcome. Motivation to win and earn money is the biggest factor.
Trading vs. Gaming Risk
Both traders and gamers find risk assessment to be the focus of participating on different markets in order to make a profit. This can be done either by wagering an amount of money or by detecting chances that can lead to winning status. Same logic can not be used in trading and gaming world. Read more below.
Risk in Gaming Industry
When people think on gaming, the first that comes in their mind are online gaming sites. These sites include online casinos with a wide selection of different games, including poker, slots, bingo, roulette etc.
So let’s say, you are a gamer and want to know how to profit from playing online casino games. Since software basically executes entire job and manages the way of odds outcomes, it can be pretty challenging for player to create his own chances to win.
Software itself uses random algorithms to create specific odds and it takes a special level of expertise to understand strategies, which can be used to increase odds of winning and achieving high payouts. To master those strategies, a great amount of data is required for players to be able to accurately predict final outcome.
Risk in Trading Industry
Unlike gaming risk, South African traders should know that risk on financial markets, such as in binary options industry is completely different.
This trading risk involves risk in short term period, as in forex, binary options or CFDs and also long term risks.
In binary options, risk can depend on several variables.
One of them is an underlying asset, such as stock, currency, commodity or index. Risk level depend on the value of an asset that fluctuates as they are being traded in predetermined period of time. This is basically what’s the most important to know for all South Africans interested in binary options trading.
As a new online investment type, binary options trading is based on predicting an asset movement (up or down) in a specific time in the future.
To be successful when trading binary options is to read broker reviews to get better understanding of available trading features and check the latest important market news and reports.
This can serve as great help to increase chances of winning and have more knowledge in order to accurately predict possible effect that might influence on specific asset. Sites, such as financialmail.co.za, moneyweb.co.za and fin24.com are an excellent prime sources for valuable financial news.
Popularity of Binary Options Trading and Gaming
It is assumed that gaming and trading industry target different types of people. In gaming world, luck and excitement are the peak of player’s experience.
Usually, luck is the most important element to succeed in case strategies aren’t followed. A lot of online gaming sites have tendency to offer bonuses to reward their players and offer them exactly what they want – more thrill to enjoy the game.
Binary options trading also brings thrill for their traders, but in a different way. Binary industry appeared in late 2008. Since then, they quickly gathered a lot of people worldwide who wanted to experience this new way of online investment.
Thanks to its many benefits and great possibility to maximize profit, binary options trading is widespread in South Africa. Traders are able to invest in binary options with many reliable brokers, listed here in our trusted binary options brokers list.
South Africans are able to trade with different trade options, such as 60 Second, which enables excitement in 60 seconds, High/Low, One Touch, Ladder and many more, depending on which broker traders select. Binary industry enables a wide selection of expiry times, both short term and long term, up to 150 days.
Majority of traders who are interested in online trading or gaming industry, prefer those who are regulated.
Traders in South Africa should know that both industries are covered by gaming authorities, that provide them regulatory license.
There are few countries which enable regulation to binary brokers and other gaming companies to conduct their business transparent.
First one is Cyprus and well-known CySEC (Cyprus Securities and Exchange Commission) regulatory body. CySEC is responsible for binary brokers and oversee if EU rules are implemented on their trading platform.
However, in gaming world, it is obligation of the regulator by which software has to ensure a specific payout that is spent playing. This is logical, because otherwise there are room for manipulation on payouts of funds on machines. They could easily use player’s incapacity to track the odds and make false promises of possible jackpot.
Nowadays, there is approx 95% of possible return and it all depends if a big sum of money has been paid recently.
Binary Trading vs. Online Gambling Conclusion
To summarize, although there are some elements which are similar to trading and gaming, it is clear how there are even more differences, without mentioning differences between trading and gambling.
As stated above in the article, to answer the question is binary options gambling or not, answer is definitely no.
Both gaming and binary options industry imply that traders have to invest and risk their own funds. However, experience, motivation and strategy are those that make the key difference between them.
Although, luck can turn out to be handy sometimes, but in binary options trading, traders in South Africa should rely on strategies, analysis and understanding of financial market and available trading instruments which can lead them to achieving high payouts.