Binary Options Brokers Terms & Conditions – Why Don’t You Read Them!?
What’s bothering me the most, as both a reviewer and as a trader, is that many traders don’t tend to read the restrictions or the terms and conditions, in other words, the small print at the bottom of the agreement. If you ask me, the first thing I will do when I want to learn more about a specific broker is to read the FAQ section, and the restrictions applied to the transactions. Basically, I collect pieces of information and add them into the big picture. Sometimes just by looking for general information I can immediately form a clear picture concerning the broker and his business practices, and often all of these various pieces of information can provoke or compel my suspicions of Binary Options fraud. The next few paragraphs will provide our readers a sense of what to look for when choosing the correct Binary Options broker, one which will appear to not be a scam broker.
Deposit/Withdrawal Min/Max and Methods
Before investing money, one should first set up for himself budget limits. From my experience, very few Binary Options brokers allow minimum deposits of less than $200. The average initial deposit is around $200, however, some brokers do offer a lower minimum deposit ($100) while others will demand higher initial fees ($250 – $300). Some rude brokers demand up to $500 for the initial deposit. I don’t think any beginner should invest such an amount on their first deposit, I think that’s outrageous. Look for those brokers who demands around $200 for the initial fee. After doing so, check out the deposit methods to find out how to deposit. In today’s Binary Options industry, most brokers have the same methods so I don’t expect any trouble from that aspect, but stay aware.
Most brokers have different accounts like Mini, Standard, Pro or VIP (the names differ from broker to broker). The smallest account is usually $200 as I mentioned above but the next account jumps to $1000 (or more) and some brokers will recommend this account for newbies, saying that you need more money so you can recover from losses easier. This is relatively true because you don’t want to be undercapitalized but if you apply a safe money management plan (say all your open trades don’t exceed 5% of the entire account), then it doesn’t really matter how big your account is. Especially if you are a newbie, test the waters by opening the smallest account available. This way you will see how the broker is treating you, if they are pressuring you to deposit more, if they allow you to withdraw reasonably fast, etc. Of course, if you want to deposit the minimum, you have to find a brokerage that allows low trade amounts ($5 or $10) because if your account is $200 and the lowest trade size is $25, you’ll burn through that account pretty fast.
As for the deposits, I haven’t seen any broker who charge additional fees, especially not at the initial deposit. Withdrawals are not alike. However, most brokers offer their clients the same methods for withdrawals as they offer for deposits. From that aspect I think you should be OK unless you see too many odd additional withdrawal restrictions. For example, some brokers charge up to $30 for money transfers, some charge the same fees for more than one withdrawal per month. But what bothers me the most are those Binary Options brokers who demand a minimum withdrawal. It’s OK by me to ask for a minimum withdrawal of $30 tops, but asking for more than $50? It’s not all right. My recommendation is to look for brokers who don’t charge too much additional fees (less important, though) and those who don’t demand minimum withdrawals (or at least a low minimum).
Price/Quotes Offered by the Binary Options Broker
I have seen many frustrated traders complaining about this issue. Well, for those of who don’t know- most Binary Options brokers, not all of them, but a large segment, offer a different price/quote for a certain asset from the real-time Reuters price. Binary Options work with a different pricing formula, which is based on Reuters but is different (a very slight difference, though) since they represent the price that the specific broker is willing to offer. Many of those frustrated traders have missed this rather important restriction and therefore lost their money, for a stupid reason actually. Most Binary Options brokers, and of course all reputed brokers, provide traders with charts and quotes that represent their offer. Checking Reuters or all other financial tools consistently is important in order to better understand the asset and its performance. But one must be aware that the actual value should only be as offered by the specific broker. After checking those financial tools, keep a close eye on the charts provided by your broker and make your decision whether to invest Call/Put based on your broker’s charts. In case you see any serious differences between the real time price represented by Reuters, etc. and your broker, you should immediately stop trading and contact your account manager for more information.
Just to make it clear, I am not implying that these differences between quotes are some kind of a Binary Options scam. Think about this: one retail outlet offers a leather jacket at the price of $250 and the boutique across the street will give it to you for $239. Does it mean that one of them is scamming you? Nope! It simply means they have different offerings. If one store sells it for $250 and another for $19.99, then probably one of them is scamming you, trying to sell you a fake leather jacket. Guess which one? Being aware of those restrictions and their implications is the key to safe and profitable trading.
Binary Options Bonus
For more information about this issue and the restrictions brokers apply to bonus factors, check out our articles section and look for the Trading Bonus issues. Our Scam Watch articles are filled with users complaining about not being able to withdraw their money if they have accepted a Bonus and until a certain trading volume is reached. This is a known issue with most binary options brokers but it is usually stipulated in their Terms and Conditions to which you agreed when you opened an account so there’s not much you can do. Well, you could refuse the Bonus… or you could read the Terms and Conditions because sometimes they contain some outrageous stuff. We’ve covered some of the most dangerous Terms and Conditions in the article What You Should Know About Binary Options Before You Deposit, so I strongly recommend you read it before opening a binary options account.
Do your homework!
Just like any other purchase you make over the internet, investing in Binary Options demands a certain amount of understanding the rules of the purchase, before and after its been closed. Let’s say I buy a certain product, why wouldn’t I check the terms and conditions concerning the payment and delivery? And after I’ve already made the purchase, what happens if the product is damaged or I don’t like it? Is there any way I could send it back and get my money returned? All these questions are basic questions one should ask himself and his broker before making a deposit. The answers to most of these questions can be found within the FAQ section or the Terms and Conditions section. If you can’t find the right answers, then you should contact customer service for clarification. Do your homework before choosing the right Binary Options brokers for you!