How to Choose a Binary Options Broker
If the preceding articles helped to inspire you to take up trading of binary options, the logical next step would be to find a suitable binary broker.
What should you look for? This article will make that easy for you.
In all trading activity, safety of trading capital is paramount. In addition, the broker must follow practices and procedures that make the business safe and reliable for its customers. For example, properly regulated forex brokers are required to place client funds in segregated bank accounts.
Binary brokers are a relatively new arrival in the financial markets and their regulation is still somewhat a grey area. Part of that has to do with recognition and classification of binary options as a financial product, and the recommended practices that should go with trading them for clients. Many brokers do not accept clients from the United States for fear of falling foul of the country’s securities laws. It would be safe to say that the vast majority of binary brokers are unregulated. Yet, to be fair, we should not assume that all unregulated brokers are out to crook you.
So, we recommend that you do try to find a regulated broker. But in case this doesn’t work out, an alternative is to pick a well-capitalized broker that has a good reputation on various Internet forums, broker review panels and general word of mouth in the industry. Secondly, keep yourself safe by limiting the trading capital that you maintain with the broker. Keep drawing out profits regularly.
Trading platform stability and functionality
Does the trading platform of the broker track the underlying asset prices properly? This is important if you use separate charting/technical analysis software for generating signals that you use to trade binary options.
- Is the broker transparent about how he calculates the expiry price?
- Is the platform easy to use, and does it offer the facility to trade from any location with various kinds of devices?
- Does it offer a wide range of assets and expiries of binary options to afford maximum flexibility to clients?
- Is the broker easily accessible through chat, email, telephone for clarifications and guidance? Is the customer service representative knowledgeable, professional and polite?
Accounts and finance
- Are the winnings credited immediately to your account? Are there various options available for you to withdraw your money, as well as deposit funds? Is the account statement easy to understand and up-to-date?
- How do the profit payout percentages for your chosen underlying asset compare with those offered at other brokers? (Remember, the higher the profit payout the lower is the asking rate on your winning ratio!)
- Does the broker offer a demo account, and more important, does he offer it free? Ideally, newbie traders should paper trade through a demo account for at least a couple of months before jumping into the real thing. This is a great facility that will open your eyes to the realities of trading binaries, without losing a pile of money in the bargain.
- Does the website of the broker offer educational material, FAQs, and video lessons that help a beginner learn the ropes on binary options?
- The above due diligence should go a long way in the proper selection of your binaries broker. Trade safe!