Avoid Terrible Binary Options Brokers with this Review Guide
When getting into binary options, the most important asset you can have is a good binary options broker. Binary option trading is very new (binary options first came into existence in 2008) and while is an easier to understand financial product, you’re still trading nonetheless. There are a few things a trader needs to look for when looking for a binary options broker:
Age of the Broker
Binary options are still a new product and many exchanges and brokers are still new. There is very little regulation in general, and it can be difficult to figure out what’s going on. For this reason, we suggest that before you even look at a binary options broker’s rates, you should look at their customer service. Any broker you look at should have multiple phone numbers, email addresses, especially a physical location, and ideally live chat, too. This way, if you have any questions at all, you can be assured that they will be answered. Binary options trading can be confusing for a beginner, and if you don’t know what you are looking at, then it is easy to make bad trades and lose your money, or even get outright scammed.
The second thing you want to look at when looking for a binary options broker is the trading platform itself. There are many different trading platforms (basically computer software that the brokers use to place your trades on the open market) and each broker will be a little bit different. You need to find a broker whose platform you feel comfortable with. Which brings us to our next point.
If you’re wondering how you find a broker whose software you feel comfortable with, just make sure you find a broker with a demo account or free account creation. Many brokers won’t even let you make accounts for free, and you have to submit billing information just to get a look at the platform. With binary options, it’s best to have a look at a few different binary options brokers before you decide where to trade. There is no shortage of brokers to try out, and if you had to pay for all of them, then you would be spending a lot of money essentially testing out brokerages to see if you like them.
Some binary options brokers feel more like a betting scheme, and others are more like legitimate trading platforms. Other brokers will let you trade other financial products in addition to binary options, or have special options that are easier to trade. All of these things are hard to figure out without testing out the trading platform for yourself.
The third thing you want to look for in a binary options broker is a licensed broker. Before a few years ago, there was no licensing or accreditation for binary options at all realistically. As long as the company had a valid lottery license, they could operate selling binary options. On non-regulated exchanges, binary option transactions didn’t even have to be monitored to ensure fair play. You can easily see where all this can lead to problems. Additionally, before 2012, many binary options weren’t even considered financial instruments (which means they weren’t regulated as strictly) in many places. All this means is that you want to find a broker that is certified and has the proper qualifications to be running a brokerage.
Prices on the Brokerage
The fourth thing you want to look for is the prices on the brokerage. The nice thing about binary options is that many brokerages don’t have trading fees. With a traditional options broker, it costs money to place a trade. You have to deal with margin calls and a bunch of other nonsense that makes the trading process more complicated. With binary options, there is none of that. The brokerage makes their money by factoring in the differences between successful and unsuccessful bets. But, what you do have to worry about is the minimum and maximum trade amounts as well as minimum deposits. For most people, the minimum deposit won’t be much of a factor, but if you’re looking to make a lot of bigger trades, or a lot of smaller ones, you’ll need to pay attention to the brokerage.
As for a brokerage to try out, One Two Trade is a good binary options broker. They are an accredited company and have years of experience running a brokerage. One of the nice things about this company is that they treat binary options seriously. Many binary options companies treat them like you are betting on something. Think the price of x will be higher or greater at this time? Place your bet? It’s that simple! But the reality is, binary options trading, while easier to grasp than regular options, is still quite complicated. One Two Trade has the support network set up to make sure you are a successful trader. Not only do they assign you a personal account manager, but they have plenty of materials and tutorials for not only how to trade on their platform, but trading strategies in general. One of the things that we like most about this brokerage is that they actually have a physical location that they encourage their customers to come visit for meetings. Many binary options brokerages are fly-by-night operations, and One Two Trade does everything they can to make sure you can be a successful trader. Click here to start trading.