The world of binary trading is ever-changing and fast-paced with market participants across the globe constantly looking to bid, sell…
The world of binary trading is ever-changing and fast-paced with market participants across the globe constantly looking to bid, sell and make the most profitable moves. The industry also has two main ways of organizing the financial markets, with exchange trading in the US operating differently to over-the-counter (OTC) techniques used in other countries.
O-SYSTEMS to consider signing vendor agreement with Cantor Exchange
As the very first technology company and market maker to enter the US binary options market last year, major platform provider SpotOption announcement to pull out from the US and terminate their agreement with Cantor Exchange. While the news that SpotOption would no longer accept traffic from US traders it has made way for O-SYSTEMS, a boutique, experienced, binary options software provider, to take their place.
With advanced, user-friendly binary options trading environment and specialist marketing tools, O-SYSTEMS has explained to FinanceFeeds that it has the determination, technological advancement and knowledge necessary to replace SpotOption and break into the US market with ease.
The company considers that its innovative, modern and user-friendly trading approach makes it stand out from the crowd and brings a fresh, ground-breaking perspective to US traders.
What is binary options in the US and how does exchange trading compare with OTC?
The concept of binary trading is simple to understand which is why it’s notoriously popular across the globe. Essentially, it’s a method of trading markets with a capped risk and capped profit potential based on a yes or no proposition.
Every option settles at either $0 or $100 in the US, however, the way binary options trading is carried out in the United States differs from the rest of the world in that the provision of over-the-counter binary options is prohibited.
This means that all industry participants must provide binary options via an exchange and not a de-centralized market where two parties can communicate directly with one another without supervision or specific guidance as is seen with OTC trading.
The concept of exchange trading first started when people would go to a specific space to buy and sell commodities. Thanks to the development of innovative software and trading platforms, however, exchange trading has now been catapulted into the 21st century and can be executed remotely via a set of instituted rules which govern trading and the surrounding information about particular trading moves and deals.
In short, an exchange centralises the communication of bids and offer prices to all direct market participants who can then respond by selling or buying at the quoted price or return with a different offer.
With open exchange binary trading, the price at which a transaction will be executed is also revealed to all market participants allowing them to buy as high or low as anyone else, so long as they stick to exchange trading.
It is important to spell out the fact that in the OTC world, the broker often makes its money on customer losses. This is also why the regulators are coming down hard on OTC binary options. It is quite often in the OTC brands best interest for traders to lose.
In the exchange world, traders trade against each other and NOT a broker thus there is always a winning trader and a losing trader. The exchange collects a small fee for the service of connecting buyer and seller. It’s a very fair and transparent system which is why regulators are moving towards it as has happened in the US.
The idea is that everyone is ‘kept in-the-know’ and on a level playing ground which is in direct contrast to OTC where broker-dealers negotiate directly with one another and can present an array of different quotes to fellow broker-dealers and customers at any given time. OTC markets are often considered less formal and, although well-organised and popular in countries outside of the US, do not have the supervision of an exchange.
Moving all systems into the US market is a bold move for O-SYSTEMS but one that’s perfectly within their capabilities thanks to the wide range of comprehensive services and technological benefits they offer. O-SYSTEMS is indeed very much geared up toward maximizing its expertise and looks forward to taking trading perspectives overseas to assist US traders.
Featured Photograph: Cantor Fitzgerald’s office on 499 Park Avenue, New York. Copyright FinanceFeeds#binary options, #o-systems, #technology provider, #US binary options