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How to Choose a Binary Options Broker

How to Choose a Binary Options Broker

Important Things to Look For When Choosing a Binary Options Broker

QUICK INFO: Learn to recognize the most important information when choosing a binary options broker. The first step to successful trading is a selection of a reliable broker that offers the most competitive features and supports the different varieties of trading styles of their clients.

 

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How to Choose a Binary Options Broker

How to Choose a Broker: Introduction

To learn how to trade binary options you will have to open a free acount with one of the binary optiosn brokers. Some brokers offer extensive support for beginners by providing written and video tutorials that introduce all the aspects of binary options trading. In addition some brokers will also offer live trading webinars. Selecting the right broker can be a difficult task for beginners, since mostly they are not aware of all the important differences between brokers. If you followed the first step in this tutorial and you opened an account with the listed brokers, you could already learn the differences between their trading platforms. Each platform offers a bit different set of trading options, return rates, expiry times, bonus deals etc ... Below this article you will find a full interactive comparison table, where you can compare the best featured brokers and sort them by different options and other factors described below. Let's take a look into some of the most important factors needed to take into account when selecting a broker: 

 

How to Choose a Broker: The Difference Between Brokers and Platforms

Different brokers offer different trading platforms. There is a difference between a broker and a trading platform. Broker is simply a service provider, a brokerage business owner, and a trading platform is a system, a software or an interface, which displays the market charts and enables the trader to place trades. The types of trading offered are dependent on a broker as well as on the trading platform. Most common trading platforms for binary options trading are SpotOption, TechFinancials, TradoLogic, Panda TS and lately also TradeSmarter. Some brokers (for example StockPair) offer their own independent trading platforms which are in many cases in-line or even better with some options, as the classic platforms offered by external providers. Trading platforms differ by trading types, expiry times, responsiveness, trading tools and other built-in features such as technical analysis charts, market sentiment display, autocharting or signaling addons or other similar features.

 

How to choose a Broker: Types of Binary Options Trading

Broadest selection of different trading features are offered by brokers who use the SoptOption and TechFinancials platform. Depending on the broker selection of features they want to use, the plaforms themeselves enable the following types of trading: Short Term (30sec, 60sec, 120sec, 180sec, 5min), Regular Call & Put Options (with 5, 10, 15, 20, 25, 30, ... etc expiry times, up to end of day expiry time), Long Term (with expiry times at end of day or at specific date, endo of week, end of month, etc), Touch Options, Boundary or Range Options, Above/Below Options, Option Builder, Ladder, Pairs or Pair Stocks, and lately some brokers are also introducing classic FX trading possibilities. When looking into trading options it is also very important to take a look at the expiry times offered for specific trading options.

 

How to Choose a Broker: Expiry Times Offered

When selecting a broker it is always good to pay atention to have flexible expiry times available. In addition to 60 seconds trades, offered by most brokers, it is very good to have the possibility to select 2 minutes and 5 minutes expiry times as well. For the longer expiry times it is always good if the broker offers the option to select as many different expiry options as possible. The expiry times and general list of trading options available will usually differ, based on the trading platform each broker offers. For example, the brokers who utilize the TechFinancials trading platform offer the best flexibility in the expiry times for regular call and put options and a wide selection of trading possibilities. Example of two such brokers are 24option and Boss Capital. These brokers will give you the possibility to implement many different trading strategies and systems, because all their trading options are very flexible.

 

How to Choose a Broker: Return Rates

Different binary options brokers offer different return rates on investments. The difference for similar options can be even up to 10%, which acts as an decisive factor in making profit or loss with your trading. As a general rule it is always good to choose a broker who offers high return rates, however this is not a single or most important factor. If you don't have the flexibility with previously described expiry times, you might find it difficult to implement your own profitable trading systems and even the high return can rates will not compensate for the lack of expiry times selection. Keep in mind that the return rates on short term trades are always a bit lower as return rates on regular options (with expiry longer than 5 minutes). A good return rate for short term trades (60 sec to 5 minutes) are anywhere above 72% and a good return rates on regular options are anywhere around 80%. Brokers who offer 'touch' or 'high yield touch' options or 'ladder trading' for example, will give you the possibility for much higher return rates on these trades, ranging from 250%, even up to 500% or higher. But you have to be aware that such trades can be placed only in specific market conditions and quite some experience is needed to recognize the best situations where to place such trades.

 

How to Choose a Broker: Bonus Deals

All brokers tend to offer different bonus deals. For example, if you deposit a $250 the broker will match your deposit amount and give you up to 100% bonus, so you will have $500 on your trading account available to start trading. When dealing with bonus offers you have to be aware that all bonuses come with specific conditions. Usually the condition is that you have to trade a certain volume worth of trades before you can withdraw your profits. For example, if you take a 100% bonus deal, the turnover can be even up to 40 times the amount of bonus. So in case you invested $250 it would mean that you have to make $10.000 worth of trades (win or loss) before you can withdraw your profits. Bonuses are always welcome, but you if you decide for a bonus make sure you are aware of the conditions which are tied to specific offer. Different brokers will offer different bonus conditions. However, to be able to freely withdraw your profits at any time, signing-up for a bonus deal is not advised for a first time trader.

 

How to Choose a Broker: Broker Regulation

There are two types of brokers - regulated and unregulated. Main difference is that regulated brokers will not accept traders from United States and unregulated brokers usually accept USA traders as well. Among the regulated brokers a large number of them is registered in Cyprus because of favorable taxing policy. All regulated brokers who are based in Cyprus are regulated by the national securities commission CySec. CySec offers additional security for the traders, since their regulatory requirements are quite strict and oriented towards protecting the traders investment against any fraudlent activity. Additionally, brokers can be regulated in other countries by other country specific commissions who handle forex, CFD, commodities and binary options trading platforms. Opening an account with regulated broker will give the trader additional security. However, the regulation limits the brokers from accepting the traders from USA. Many brokers choose not to get regulates, simply because they wanted to coninue offering their services to USA traders. In these cases it does not mean that, if the broker is not regulated, it is not a good choice. Some unregulated brokers still hold a good reputation amongsttheir traders and there are no complications with trading or payouts on their platforms. However, the traders from USA are limited to selection of unregulated brokers only, if they want to engage in binary options trading.

 

Related Information:

To get the most current list of regulated brokers who accept EU and INTERNATIONAL traders - CLICK HERE

To get the most current list of unregulated but trusted brokers who also accept US traders - CLICK HERE

To compare all the listed brokers by their preferences in an interactive comparison table - CLICK HERE

 
 

 

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