Digital Options can be an even bigger industry, but the brokers are the problem
The purest and simplest form of trading is known as a ‘digital’ or ‘binary option’. It is the quickest and easiest way to make a large return (between 70–90% ROI) based on capital invested in any given trade. A trader can profit simply by guessing correctly, whether the price of an asset will rise or fall between now and over a pre-determined period. For example, if a trader speculates that the price of the Euro (relative to the Dollar), will rise between now and over the next 10 minutes and wagers $10.00 on this, most digital option or binary option brokerages will reward him/her with a 75% ROI on that trade (or $7.50 in profit), if he/she has correctly guessed the outcome after the 10 minute expiry period.
Unlike random events such as dice-rolls or coin-flips, research into the financial markets (either through chart pattern technical analysis or macroeconomic analysis of the underlying asset’s fundamentals) can allow a trader to increase their odds of winning trades from just 50% to up to 80%, over time. Owing to the simplicity of the aforementioned digital options market, the potential ability to ‘beat the market’ through research and overall addictive nature of trading, growth in the digital and binary options market went hyperbolic during the 2008–2015 period, reaching a peak annual traded volume of $30bn.
Alas, greed has overcome most brokerages and many now regularly tamper with price feeds, pay-out percentages and have often started to rob clients of their capital by trading their account to zero or even blocking withdrawals. This problem is not ring-fenced to just digital options but also classic retail FX trading, where so called ‘B-Book’ brokerages directly trade against the client. Together, digital options and classic FX retail trading is a giant, mult-billion-dollar market every year, but is ridden with conflict of interest because brokers have too much power!
SPECTRE, which is built on the Ethereum block-chain, removes the broker out of the picture entirely, thereby completely disrupting the current model and empowering the trader. SPECTRE’s aim is to first disrupt the digital options industry and then, the classic FX trading industry. Stay tuned to find out just how!