In the early days (10 years ago) i made a lot of money with FX binaries. The spread was 5%, eg 20-25. And if you got in early while they were incorrectly priced you could make a profit. Now the spread is much wider eg, 14-32. So even if the mid price of binary is badly priced by the Firm. The real price is still likely to be inside that wide spread. It really is a suckers game with spreads that wide.
Nadex spreads on their more liquid contracts like the S&P 500 aren't nearly that wide during the trading day, more like 5 points. They're not perfect, but they're CFTC regulated and won't steal your money and the market is as fair as it gets since anyone can make a market. If you can make money on 5% spreads in binaries I'd encourage you to take a look at Nadex. Note that this applies to Nadex and only Nadex. The only other regulated binary exchange in the U.S. is CantorExchange which does unfortunately still have pretty wide spreads, although a spectacularly helpful and responsive customer service and management team. Any other binary options broker is taking a principal position opposite their customer, and all the advice previously given here applies.
Binary options are a scam at worst and a pure coin toss gamble at best where you either win 80% or lose 100%. This puts the odds squarely in the favor of the house, which it turns out, is your "broker" who has the other side of all your bets. Most of these brokers won't even let you get your money back out if you win. Seriously you are better off buying lottery tickets.
Not when you trade at NADEX. You should never pay more than $48/contract trading there (of course you can, but you shouldn't) as then you're always going to net 100% after their fees. If you can get direction right and be patient, it's tough to find a better instrument to trade.
PPPPFFFFFFFFFFFTTTTTTTTTTTTT Better instument? Says that your maximum profit is 100%, What about an exchange option that goes screaming past your 100% point and then turns goes 10X on a identical trade. Take ur pick, 2X return with binary or 10X from the exchange with the same trade. I've seen ES calls jump 10X on expiry day from FED releases.
100% isn't the max return. That's the minimum you should aim for. It's rare, but I've hit $8 pays $100 before. The point is that you just have to be right on the barrier expiring ITM, whether by one tick or a hundred. anyway, nobody has a gun to your head lol. Do whatever TF you want!
If you buy a binary at $1 it can expire at $100. That's a 100X return. Not saying that ES calls aren't more appropriate than binary options in some situations, although I'd go with SPX calls so I don't have to take delivery of the ES underlying. However the assertion that you're limited to a 100% profit with binary options is simply incorrect.
I just did these. I've never gotten a sub-$4 fill until now lol. (Sold 97.5). I should've let them expire as I gave up $41/contract, but I wasn't sure of the outcome. Still not bad to sell 97.5 (risking $2.50) and cover at $41.5. 22x return give/take. like I said, it's rare but it does happen.