Choosing a broker is one of the most important aspects of social trading binary options. At the core of the business they are all the same, they offer short term speculative options based on assets traded around the world with only two possible outcomes. It is the details that set each broker apart. Too many times I read complaints, criticisms or charges of scams and fraud that can be directly linked to the offended trader not reading the terms and conditions for the broker. You have to do your homework when it comes to choosing a broker. They are not all the same when it comes to things like available assets, who can trade, minimum deposits, withdrawal policies, bonuses, types of options and available expiries. What makes one broker right for me may not make them right for you. This page is a basic guide into what you should look for in a broker.
Available Assets – Not all brokers have the same assets. Some times it depends on where the broker is located, who the target audience is and how big the firm is. Newer brokers, especially those with fewer registered traders, will usually offer fewer tradable assets than a more established broker like Anyoption. Be sure that the broker you choose has the assets you want to trade and that they are readily available. sometimes a broker will not list options for an asset if there are not enough people trading. You don’t have to worry about that with Anyoption. This is one of the oldest and most widely used of all. There are close to 200 assets ranging from commodities to forex, stocks and international indices.
Who Can Trade – Binary options regulation has been gaining traction lately and has caused some changes in who can trade. In Europe binary options are regulated by CySEC, in the U.S. by the CFTC and in Japan by the FSA. There are other countries regulating but those are the top three. Because the laws of each nation and region are different a broker in one jurisdiction may not be legal in another. Be sure to check into the regulation for your area when choosing a broker. In the U.S. the CFTC and SEC have been cracking down on “off-shore” brokers. Because of this many are no longer accepting U.S. traders, or are limiting their access. The best choice for the U.S. trader is NADEX simply because you never know when the off-shore brokers will get completely shut out of the states. If you live in Japan choose an FSA broker, if in the EU or friendly nation use a CySEC broker or one licensed in another EU nation. LBinary is based in London, regulated by CySEC and accepting U.S.customers at this time.
Minimum Deposit – Is usually not a big deal. For the most part minimum deposits will range from $100 to $500 depending on what the minimum trade amount is. Nadex is low with a $1250 minimum deposit.
Withdrawal – Withdrawal is one of the biggest areas of concern for binary traders. When reading the terms this is one part you should be sure to read in full. U.S. traders using Nadex have no fear of withdrawal, that money can be withdrawn at any time in any amount with no fees and will process within day. Other than that you are at the mercy of the individual broker. LBinary claims to be the fastest withdrawal in the binary options industry. Once you have completed all informational requirements withdrawals are processed and delivered in three days. The best method for withdrawing or depositing with your binary options account is Skrill or other online wallet.
Bonuses – Bonuses are one feature of binary options that I do not often recommend. Many brokers offer “free” money in the form of deposit and sign up bonuses. The amount varies from broker to broker and will depend on factors like how much money you deposit. Bonuses require a deposit, they also require a minimum trading volume. This is usually in the range of 20-50 times the initial account value plus bonus. This means that if you deposit $10,000 and get a 100% bonus your initial value will be $20,000 and you would have to place trades in the amount of $400,000 or more before the bonus is yours. On top of that, if you make any withdrawals before reaching the minimum trade volume you will void the bonus and all profits related to it (sometimes all profits period). LBinary requires a minimum volume of 25 Anyoption only 15, which is the lowest in the industry. There are no bonuses at Nadex.
Types of Options – There are two basic types of binary options, over/under and 0-100. Nadex is strictly 0-100 binary options and offers several different strike prices for each asset and expiry. Anyoption is a leading innovator of the off-shore industry and is the only one with this type of option. Anyoption also has over/under options which is the standard for the rest of the international binary options industry. In addition to over/under (also called high/low or call/put options) the international community also offers options like one touch, boundary, range, options builder and 60 second options. LBinary has the full range of available option types except 0-100, Anyoption has call/puts and 0-100 while Nadex is strictly 0-100. Nadex also has bull spreads which are a combination of binary and pips trading.
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Available Expiry’s – Again, this is important to check as well. Not all brokers have the same expiry’s. I have seen brokers with an awesome asset list but only offering 15 minute expiration. This is good for some but not for me. SpotOption brokers like LBinary have expirations ranging from 60 seconds to 5 minutes, a half hour, one hour end of day, end of week, next week, end of month and the next month and so on until the end of the year. This is perhaps the most extensive expiry listing. Anyoption has expiry as short as 1 hour up to the end of the month. 0-100 options, available at Nadex and Anyoption, have the shortest expiry because they are the only tradable binary options. That is, they are the only ones you can sell before expiration. You can hold them until expiration or sell them as soon as the asset moves into the money.
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