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What To Look For When Choosing A Binary Options Broker
I started to call this article “How To Pick The Best Binary Options Broker” but quickly changed my mind. Who is to say which broker is the absolute best. There are many differences between brokers and between traders too. What one broker offers may not make it best for you while making it the top choice for someone else. Instead I think this is better, or maybe “How To Choose The Right Broker” because choosing the right broker is much more important than anything else. There are several things to consider when trying to pick which broker is right for you and I am going to try and highlight each of them here today.
Binary Options Regulation
Regulation is one of the most important factors in choosing the right broker. Most of the binary industry exists in the limbo of international off-shore banking and is largely unregulated. More and more are beginning to fall under the jurisdiction of one regulatory body or another as the world slowly begins to recognize that binary trading is here to stay. The first step is to check into your local regulations to make sure it is legal for you trade. If you are in Japan you will have access to Japanese FSA regulated binary options brokers and no others. If you are in the EU you will have access to CySEC regulated brokers and others but there may be restrictions or other issues if you choose a non-regulated broker. In the U. S. you will have a much harder time. The CFTC refuses to regulate and allow spot binary in the U. S. but there are still a few CySEC brokers who will accept you. Regulation does not necessarily make one broker better than another so dont fell like you have to pick one. There are still quite a few unregulated brokers with good standing in the community.
Asset List
The asset list is the next thing I look at. As I mentioned before there are a lot of differences between one broker and the next. Some are focused on forex binary and others have a more cosmopolitan assortment. Always check to see what is available. I like to trade a little forex, a few indices and a few commodities. My broker needs to have them. After you check the list you should also check the platform itself. Just because a broker lists an asset on the website does not mean it will be available for trading. Or available when you want to trade it. Smaller brokers usually have less assets, and the ones they do have may not always be available, only when they allow it.
Types Of Options
Option types and the platform is the next thing to check into. First, look at the platform. Is it laid out in a way that is easy to understand? Most binary brokers use a similar interface showing each asset, the position, your entry price and the expiration. If so, what options are available? The standard binary options is the high/low options. Also known as Call/Put, Over/Under or Rise/Fall. This a spot position predicting whether the asset will be higher or lower than the current price at expiration. After this there are a few types of commonly found options you should look for. If you dont trade these kinds then finding a broker with them is less important. Range binary options predict if an asset will be inside or outside a range by expiration. There are variations on this trade so check it thoroughly. Sometimes the asset must move into, or out of, the range. Sometimes it must stay inside, or outside, the entire time or other twists on the trade which could result in losses. Touch options require the asset to touch a set strike price only once during the options life. This is usually dependent on a close at or beyond the price and could be a short or long term position.
As far as the trading platform goes expiry is the final qualification for what make it right or not. I like to trade with weekly or monthly expirations so I need a platform that has those expirations. Some people like to trade end of day or 15 minutes. Expiry is one of the most variable differences between brokers. Let me repeat this, expiry is one of the most variable differences between brokers. Check very carefull which expiries are available before you make a deposit. There is no point using a broker that only has an expiry every 15 minutes from purchase if you want to trade options with 4 hour expiry.
Deposits And Withdrawals
In the end it is the deposits and withdrawals that binary trading is all about. Getting your money into and out of your account. Deposits are always easy but as of yet, I have not seen a broker actually suggesting you use the best means of deposit, Skrill (or MoneyBookers or other online wallet). These online wallets give you much quicker, easier and seamless access to your binary options accounts than relying on credit cards or wire transfers, especially for withdrawals. Always check the terms and conditions of each broker concerning the withdrawals. This is particularly necessary if you accept a bonus. On average it will take 2-5 business days for a withdrawal request to process, and then up to 10 business days for it to clear to your account. Some brokers charge withdrawal fees, others do not, usually in the range of $25-$30 dollars. Some brokers will waive the first fee each month. Taking a bonus can adversely impact you ability to withdraw profits. Bonuses usually come with trading volume minimums which mean you must make trades in the range of 20-50 times the value of the bonus before you can even attempt to withdraw. Of course, withdrawing from a CySEC or FSA regulated broker is much easier, quicker and reliableone benefit of regulation.