5 Things You MUST Know Before You Pick A Binary Options Broker (Dont Say We Didnt Warn You!)
Binary Option Trading might be the riskiest, highest ROI investment and trading option available online today. If you are looking to make a huge profit quickly it CAN be done with these instruments. However, there are just as many people losing money as those creating wealth. Its important you start of the right way to increase your chances for sustainable profits.
Anytime a high return investment opportunity develops there are always sharks circling the business looking for a way to make a fast buck off unsuspecting newbies.
First, Binary Option Trading is NOT for everyone. This is for a disciplined trader/investor who understand smart money management, doesnt get overly emotional when trading (winning or losing), and treats their activities like a business.
The Forex market was (and is) one of the most volatile and profitable ways to trade online. The advantage of having the foreign currencies trade 24/7 is also a great advantage.
Binary Options takes this one step further. Binary Option trading is basically creating option on Forex trades. You can get tremendous percentage wins, or get wiped out. And the real beauty of options trading is that some brokers allow 60 second option trades. No worrying all night what your spread will open up at in the morning. 60 seconds, win or lose.
HERES THE CATCH!
To trade binary options you MUST use a broker. And, as we said above, there are some things you need to watch out for when selecting a options broker to execute your trades and hold you money. Ignore these 5 important steps at your own peril! (click here to see our current highest rated company )
Heres You Checklist To Improve Your Chances Of Choosing A Good Brokerage
#1; Help And Education:
They should provide an excellent training program. The more information and training you can digest before you risk your hard earned money, the better. Dont make a deposit to open an account with a broker that doesnt provide helpful, updated resources for you to become a better trader. There should also be a free demo account available so you can get used to the technical aspects of trading before you risk your money live.
#2; Regulations an Geography:
This industry is not heavily regulated. There are jurisdictions that do not permit binary option companies to establish themselves there. For example, there is/was a broker who claims to be in the USA. In fact, they are running out of Israel. If a broker says they are US or UK based, they arent being transparent. At this time, the most regulated country that accepts binary option brokers is Cyprus. Look for brokers who are under regulatory scrutiny from Cyprus
#3) Whos Holding Your Money?
In many cases your deposit is simply accumulated within the brokerage account. If there are no regulations in that jurisdiction you can lose all your deposits, and your profits. Some (very few) have your money insured by a third party such as Lloyds of London or other highly rated insurance institutes. Make sure your deposits are safe!
#4) Trading Platform:
There are a number of various trading platforms and technology used in the binary option and forex broker business. Some are untested and some are established. A platform that has been around for a few years will tend to have most of the bugs ironed out. Brand new technology has a habit of breaking on your right when you hit the execute button. Also, most of the option brokerages who are using stable platforms will offer you a much wider range of trading
instruments and time schedules then the brand new spanking software. We recommend you find a broker with a lot of trading options and a well known platform. Ask, Do they offer 60 second trades, One touch mobile trades, long term trades, and a large basket of assets to choose from?
#5) Age and Reputation:
Unfortunately, there have been some very slick marketing promotions of new brokers who offer the world, say they will provide everything and the moon, get a ton of people to open accounts and start trading, and then close up shop without paying out profits, earnings and initial deposits. You need to find a company that has been in business for a while, has an online reputation, and is easy to contact by phone, chat and . Risking your deposit to a fly-by -
night upstart is not a first smart step in trying to profit from binary option trading.
Conclusion:
There are many brokers who dont have 2 or 3 of the above 5 points. Run away from them as fast as you can!
The are a few that have 3/5 or 4/5
Our best recommendation (at the moment) is a business option brokerage that has 5/5.
Click here to read our complete review of this broker
The Team at Boptnews
ps. and if you are really looking for high risk/high reward trading, how about binary option trading where you can using Bitcoin as an tradable asset. Heres a link to a brokerage that is promoting that idea.
Thinking About Option Trading Quiz
Depending on their investor profile investors can be divided into different groups. Some may be short-term investors who deal intra-day trading and others prefer to purchase and hold and theyre considered long-term investors. Some may like to diversify their asset over many instruments and others prefer to invest in one. Some are risk tolerant and some buy only in mid-cap. So, before you want to learn to trade options first find out about your profile because one strategy does not fit all the different personalities. There are many factors that develop the profile. Your investment goals, objectives, will then be inline with the answers you provide through the profile quiz.
Investment Objective-Your broker wont approve your application unless you select most aggressive investment objective. This is because credit spreads are considered high risk financial instruments.
Investment Experience-You must report at least 5 years of stock trading, credit spread experience, and option trading. I realize that its a catch 22 if youre applying for credit spreads for the first time. You need credit spread experience to get approved. However, your broker doesnt want any liability in you trading financial instruments that you dont understand.
A Few Other Things
Quiz-Some brokers like Optionsxpress have a quiz that you must pass, with a view to get approved for credit spreads. Make sure you understand the difference between net debit and net credit and can demonstrate the maximum loss or maximum gain for any given trade. Fidelity doesnt have a quiz as of the preparation of the present article.
Minimum Equity Requirement-You are required to have $10, 000 minimum equity in your account to trade credit spreads. This may not change the application process. However, it will affect your capacity to make trades if youre approved. You will also need to provide the maximal loss of the trade upfront every time you trade, so that your broker doesnt risk losing money.
The 37-year-old, who runs a crockery stall at Cardiff market, switched to the Co-operative Bank, which has a long-established ethical policy. The bank launched it more than 20 years ago, in 1992, and it covers four key areas: human rights, international development, ecological impact and animal welfare. The policy means the bank wont lend to firms that systematically fail to implement basic labour rights; those involved in fossil-fuel extraction such as coal, oil and gas; companies involved in animal testing for
Now if you wish to learn to trade options you must know your investment personality type so can potentially maximise your gain and cut off chances of loss by using strategies that are best placed to your personality type. Options are a type of security like stocks, mutual funds or bonds. They are often regarded as having better risk management options than other types of trading. So if youre an investor who prefers to have managed risk, then you should learn to trade options. As any wise investor you need to dispose of the right education before you start trading options. Go through some quality tutorials that will teach you options in a simple language and not overloaded with technical terms.
When you choose an online training program to learn to trade options you should also look around for the services they offer. Some good training modules that will start you with options education, from the basics, online sessions on market intelligence run by actual experts, so that you will be able to address and clarify and doubts or concerns you may have, options trade recommendations. options trading strategies and much more. Going through your investor profile youll understand what option strategies are best suited to your risk profile.
You must understand that trading options involves risk however this can be managed through the right strategies just like stocks or mutual funds. Your investor profile will give you a greater understanding of the risks and to draw to trade options with this support youll experience a stronger start. Options Trade Recommendations service can send notifications straight to your mobile phone. So all you would need to do is call your agent or put it on the trading platform. So, take your time and go through the training, as it is a vital stage in your success of options trading.