What is the real (Binary Option)? And is trading binary options considered genuine gambling?

We Should Know About Binary Trading First

For investors looking for new financial products to create opportunities for trading success, it’s not unusual. Binary trading has become one of the increasingly popular products over the past few years. If you’re still wondering what is binary trading, let’s understand it step by step.

What Does (Binary Option) Mean?

Binary trading is a type of Option where the returns depend on the movement of the underlying asset’s price. Investors must predict whether the asset’s price will rise or fall from the opening level.

A key characteristic is that the payout is “All or Nothing” (All or Nothing) — if your prediction is correct, you will receive 70-85% of your investment; if wrong, you lose the entire investment.

The trading period for binary options is very short, often 1 minute, 5 minutes, or 15 minutes, allowing investors to see the results and risks clearly before starting.

How Many Ways Are There to Trade Binary Options?

Generally, there are two ways to open a position in binary trading:

Call Option - Predict Price Rise

This order indicates you expect the asset’s price to be higher than the current price in the future. If your prediction is correct, you will receive a return.

Put Option - Predict Price Fall

This order indicates you expect the asset’s price to be lower than the current price. A correct prediction will also yield a return.

How to Trade Binary Options in Detail

When trading binary options, the outcome will only be two ways — win or lose, with no middle ground.

Example of trading: Suppose you trade the GBPUSD currency pair at a current price of 1.3902 for 5 minutes. You invest $100 and predict that the price will go up.

• If correct: After 5 minutes, if GBPUSD closes above 1.3902, you will receive $185 ($100 your principal + $85 return)

• If incorrect: If GBPUSD closes below 1.3902, you will lose $100 everything.

Is Binary Trading Really Gambling?

This is a question many investors wonder about. The answer depends on your approach.

If you trade randomly — make decisions based on emotions, without a money management plan, and without calculating risks — yes, it is gambling.

If you trade rationally — with a plan, data analysis, careful capital management — then it is not gambling. It is strategic investing.

The Legal Status of Binary Trading Worldwide

Thailand - No legal support yet

Currently, Thailand has no clear laws regarding binary trading. This means if you lose money with a foreign broker, you must sue yourself, which is complicated, costly, and often difficult to succeed.

Countries that Ban Binary Trading

Many countries have officially banned Binary Options:

Australia (ASIC) - Bans retail investors from investing because only 20% profit from this tool (since May 3, 2021)

United States - FBI reports that most are scam websites and do not recommend investing.

Europe (ESMA) - Banned marketing and selling Binary Options to retail investors since March 23, 2018.

Belgium - Banned trading since August 2016 due to fraud concerns.

Canada - Banned online advertising and trading options with less than 30 days of age.

Israel - Banned trading as it is considered gambling, not investment.

Germany (BaFin) - Planning to ban advertising and selling to retail investors.

Binary Trading vs Forex Trading - What’s the Difference?

Both are popular financial instruments, but they have several key differences.

Similarities

• Both can be traded online
• Require relatively low capital to start
• Can profit from price increases or decreases
• Offer huge returns if predictions are correct

Major Differences

Timeframe and Duration:

• Binary trading - very short-term (1-15 minutes), cannot be changed after starting
• Forex trading - no expiration date, can hold positions for days, months, or longer

Risk Level:

• Binary trading - profit/loss is fixed, regardless of volatility
• Forex trading - volatility directly affects profit/loss; accounts can be wiped out

Profitability Potential:

• Binary trading - typical returns are 50-80% of the investment; leverage cannot be used
• Forex trading - can achieve over 200% returns with leverage

Which Trading Method Should You Choose?

If you want:

• Clear and predictable risk
• Accurate short-term predictions consistently (80%+)

→ Binary trading might suit you.

If you want:

• Higher returns and more flexibility
• Ability to set your own profit and stop-loss points
• Willing to accept higher risks

→ Forex trading could be a better choice.

Summary

Binary trading is a tool with the advantage of clearly defined risk, but it also has limitations in returns and high risk when not properly planned.

Forex offers the potential for larger gains but comes with risks that must be managed carefully.

Regardless of the tool you choose, the most important thing is to learn first, have a clear plan, manage your funds reasonably, and continuously evaluate and improve your strategy.