The question, always asked by the users, is the ways option brokers also gain profit? Logically, if brokers do not get benefit, then they are out of the options field. That is why it is interesting, how can they also manage to bring the money to their users?
Option brokers are working – on the funds lost by unlucky and unwilling to learn traders. So, in order to become beneficial it is obligatory to learn and investigate a lot.
Here is the description of how the brokers earn the profit.
The ways in which option brokers get the profit
There a 2 methods of money earning for brokers, which include gains on the lost deals of the users, and fees for various services and features offered by the broker during operating.
These ways have the distinction between them that in one way the funds will go to the broker and in other way to another user if there exists the market-operating mechanism.
Earning on lost deals
For each user it is clear that the funds lost in deal will go to the broker.
However, what if every user would win? In this case the broker would become bankrupt. But this, will never be like this, because the majority of users lose on their deals.
And this is not because operating is too complicated. The actual reason for this is these users do not want to learn how to operate. Thus, it is your choice to learn and to win, or to lose.
Earning through services fee & operating on the market mechanism
One more method to get profit for the brokers is take charges from services offered and transfer the money lost on the deal to another trader. In options operating there are brokers, which allow traders to operate against each other. Thus during the operating the broker is charging its fee, which depends on the deposited sum, and in case one traders loses, the money will go to the winner, excluding the commission of the broker.
US binary options brokers: Beneficial Brokers
It is thought that market-operating mechanism is more protected, because in this case broker is not interested in user losing the trade, as in any case it will get its commission. But it is not true, because today the majority of brokers are regulated and for any kind of abuse, they would get punished. So chose stable and respective brokers.