Can someone explain please: How option brokers make money?
- Thread starter glmx
- Start date
By "consistent" I mean a trader who demonstrates greater/lesser amounts won vs. lost over time - not that they always win or always lose. The hardest part is finding them: once found, following them is no harder than employing sound money management rules.
Good traders won't broadcast their trades in real time, but their brokers are in a unique position to know if their track record is real and then to copy/fade them.
binary options are NOT options they are bets, and the money is made on big fat spreads and the trader's big fat losses. Proper options brokers charge a fixed commission unless you have an advisory service
Yep, my mistake, I forgot to add the word BINARY while writing the title of the thread. (I would love if moderators could correct the title and put it there).
I was about to write a reply here couple of days ago saying that the logical conclusion is that they would do a kind of a batch trade from a time to time, managing their risks, taking positions all together as a batch using a kind of a software that would do that but...
I just found this video where a guy's account was blocked once he doubled his initial 3k investment and requested a withdraw:
The guy had even a VIP account and his own manager and they wouldn't let him withdraw even his initial investment, simply blocked the account and asking for his strategy. From what I saw within the comments the guy was winning 99% of the time and they wanted to know his strategy as like they don't have the track of all of what he was doing while trading.
So, if that video is legit, then the conclusion and answer to my question would be simple: they don't benefit in any way if you are an exceptional trader and they seem not to be different from casinos at all.
My question was primarily regarding the IQ Option broker (their huge leverage offers got me pretty interested in first place) so I don't want to generalize them all but after a disappointing case like that some needs to be very convincing about how they do cover their users' trades.
Usually? Most of them are scammers. Some are even connected to organized crime.
You have asked about the how the option broker makes money, Option broker is the person who buys or sell put or call option, they also some time put a cap on an investment, which allows them to deal with the risk of option value to fall they have secure their investment by fixing an amount at the start of trading.
What????