Cent Binary Options
A cent binary option is not a very frequent phenomenon. Currently, this service is available only in a few brokerage firms. At the same time in this type of accounts there are enough pluses and minuses. However, let's start from the very beginning.
A cent binary option is a type of account in which the calculation of the contract cost is carried out not in dollars but in American cents. It's simple. The essence of the trade does not undergo any changes. Only the unit of the cost calculation of traded assets is changed, and as a consequence, the cost of the transactions when buying binary options.
Thus, you complete invoice for $ 100 and with the calculation of transactions in terms of a cent you can see on the account not $ 100, but 10 000 cents. At the same time transactions are also carried out in cents. If you have previously entered the transaction with a size of $ 20, the figure 20 now will mean 20 cents.
What brokers offer cent binary options?
Currently, cent accounts for trading binary options are provided by the following brokerage companies:
All listed companies are in our ranking of brokers and you can get acquainted with their trading conditions in more details. However, in this article, we note that at the moment cent accounts are opened only for the MT4 trading terminals. Thus, the cent binary options trading is possible only on Meta Trader 4 platform.
Why there are the cent accounts?
1. Cent accounts is a fraud of the greed of the trader. Too many traders cannot trade on demo accounts. It seems to them that there is nothing easier: take and trade. Test strategy, hone skills of money management, etc. No matter how strange it seems, but it is the theory of "incredible." These traders believe that the sale of "not for money" loses any material connotations, including a subconscious level, so the demo account does not really learn how to trade.
2. Cent accounts is a tool for testing trading robots. Currently, trade binary options with your own trading robots is a reality that is available through terminals MT4. The owners of the terminals can enjoy writing this trading robot on the basis of their own trading strategies, buy or download free a robot on specialized sites. However, after testing of the automated trading system on a demo account MT4, many traders start testing cent accounts, in order to understand and test the advisor in the real market. To do this, there are certain reasons: first, in actual accounts there is a slip of orders that are not in the demo mode (in manual trading it is almost imperceptible, but for shopping in the EA in reality it can make a big difference). Second, brokers conditions of demo accounts are somewhat different from the demo. Therefore, in order to understand how to trade with the adviser in the real market, traders enter cent accounts. In particular, if the robot "merges" the deposit, it is better if it is $10 - $ 20 (in a cent equivalent 1000-2000 cents USD), than in reality when trading robot "merges" the deposit of $1000 - $ 2000.
3. The need to create a margin of deposit's safety. Many advisors of trading binary options are based on an algorithm of multiplication of commercial lots. In simple words - on the Martingale strategy. That is, the algorithm of an advisor is built on a doubling or even tripling the size of the next transaction in the preparation of loss on the previous one. Thus, such an aggressive trade should be based on quite a large deposit (at least $ 2000-3000). If the trade is conducted on three financial assets, then the size of the deposit should be multiplied by 3. Thus, the size of the minimum required deposit is increased to $ 6000 $ -9000. Agree, the amount is big enough ... If there is no money or if you do not want to risk at once, and need to further verify the disability of the trading robot !? Of course, for this Cent binary options were created, that is, Cent accounts for trading binary options.
What is the difference of cent accounts from the real ones?
As to the mentioned above Instaforex, GrandCapital, then the differences between their cent and real accounts is absolutely absent. At the same time if you open up a cent account in these companies, you need to know that trading conditions of these brokers are quite different from all the others offered by other brokers of binary options.
The bottom line is that the Meta Trader 4 platform, which is offered by the brokerage companies mentioned above, is not sufficiently adapted to trade binary options. This trading platform was created to trade in the Forex market and was further developed for trading binary options.
Therefore, in MT4 you can trade only classical binary options also known as «Digital» options. If you remember, this is the easiest option, the conditions for profit of which are to identify correctly the direction of option motion. At the same time, strike-levels and other types of options in the terminal MT4 are not available.
Thus, in the above mentioned brokerage companies and terminal MT4 you will not find such binary options as a One-Touch, Range and Below, which some traders have become accustomed to use due to their high profitability.
What are the pros of cent accounts for binary options? Look:
- 100 times reduction of the risk;
- no necessity of having more funds to open the initial deposit, as all the listed companies offer a minimum cent deposit which is equal to $ 10;
- the possibility of use trading advisors in such accounts;
- a great way to test the trading robots for binary options;
- As part of the cent accounts on MT4 trading terminal, it is possible to do manual trading and use your own trading strategies.
- 100 times less the amount of profit;
- the absence of other popular types of binary options, such as: One-Touch, Range and Below.