How to Compare and Choose Your Binary Options Broker?
There are two key elements which must come together in order for us to make money out of Binary Options: our trading and our binary options broker. The trading part is complex, it involves a lot of training and practice and it’s covered in detail in our School section. So let’s assume you’ve mastered all aspects of your trading, now it’s time to choose a broker. Choosing a broker can give you some headaches of its own, so let’s see what are the most common and best ways to compare between binary options brokers.
How to Compare Between Binary Options Brokers:
- Accessibility and Support
- Bonuses and Promotions
- Trade-Related Aspects
- Training and Education
1. Accessibility and Support (or – The Common)
Although this doesn’t seem such a big issue, it may as well be. English is a widespread language, but not everyone speaks or understands it. In fact, a lot of people just speak their native language so they will only look for a broker with a website they can understand.
It is known that some platforms are more user-friendly than others, but they can lose some of the complexity required by advanced traders. This category is closely related to the type of trader you are: if you need special orders and complex tools, you will probably go for a platform which is more focused on those aspects than on ease of use.
1.3 Customer Support
Binary Options are quickly turning into a frenzy. Everyone wants a piece of the quick action and potentially easy profits, but many wannabe traders have no idea where to begin so they need guidance; they need a person to talk to and to teach them what to do. That’s why a lot of people compare brokers by the Support offered and by the knowledge possessed by the broker’s Account Managers or Live Chat operatives. Customer Support also extends to deposits and withdrawals or any technical problem that may arise.
2. Financial Aspect (or – Your Money)
2.1 Returns and Refunds
Well, it goes without saying that usually traders want a high-payout broker. After all, who wouldn’t want to make 80% on an ITM trade instead of 65%. The refund offered for Out of the Money trades adds more depth to your money management techniques and is another common way of comparing brokers.
2.2 Bonuses and Promotions
Some traders hunt big bonuses and it’s the main aspect they check when choosing a binary options broker. However, a big bonus is not always the best way to go because it comes with strings attached and often requires you to trade a certain volume before you can withdraw. Most brokers also have special promotions but these are usually limited time offers.
2.3 Minimum Deposit
Some traders just want to “test the water”, not being totally convinced that they want to trade Binary Options and that calls for a small deposit. After all, you wouldn’t want to deposit a thousand bucks just to see if trading is really for you. Other people just can’t afford a big investment and have only a few hundred bucks available for trading. It depends a lot on what type of trader you are and how deep your pockets are. Find more on types of traders in our PreSchool section.
2.4 Withdrawal and Deposit procedure
Sometimes withdrawing your money can be a daunting task which is made even more difficult by some brokers. This should be a main concern of every trader. After all, it’s frustrating (to say the least) to see your account grow, but to be unable to withdraw fast and easy. Sometimes people also look for an easy way of depositing, not only withdrawing. A quick PayPal procedure is sometimes favored over a wire transfer that requires the trader to go to the bank and fill in all that paperwork.
Usually withdrawals are accompanied by some fees which differ from broker to broker. It is normal for a trader to want those fees to be small and that’s why this is a common way to compare brokers. However, a broker can have several types of fees, not only for withdrawals. So I would recommend a careful read of their Terms and Conditions. The lower the fees, the better.
3. Trade-Related Aspects (or – Your Trading Plan)
3.1 Types of Options and Tools
Are you looking for the basic stuff like UP/DOWN options? Or do you need other types such as Boundary IN/OUT, One Touch/No Touch or 60 Seconds options? Trading tools like Close Now, Roll Over, Double Up or Option Builder are also an important factor when choosing your broker and depend on the Binary Options Platform the broker uses.
3.2 Expiry times
Some guys wouldn’t touch, 60 second options and others would never trade a monthly expiry. It all depends on the type of trader you are and what makes you comfortable. Of course, if your strategy is developed for 60 second options and Mr. BOB doesn’t offer such a short expiry time, it’s time to look for another one.
3.3 Trade amounts
This is an important part of choosing your broker and it’s directly related to the sum you want to invest. For example, if your entire account is $100 and the minimum trade amount is $25, just 4 bad trades will blow your account (assuming the broker doesn’t offer a refund). So if you want to invest a small amount in your trading, you will also want to look for a broker who offers small position sizes.
Some strategies work better on a certain asset category than another and some traders are focused only on a few assets. Actually, this is a deal breaker and most traders will dismiss right from the start brokers who don’t offer the exact assets they want to trade.
4. Training and Education
Trading without some form of training and education is gambling and since you are not looking for a gambling website, you will probably want to choose a BOB who is good at teaching you how to invest. In this category we include e-books, webinars, tutorials, one-on-one training, signals and information provided by your Account Manager. Some Brokers also offer a demo account but most of them will require you to make the minimum deposit first. You can demo trade on our very own CommuniTraders as well.
Unfortunately scams are a reality of the Binary Options industry and the best way to protect against misconduct is to go for a regulated broker. That’s a good idea but at the moment, a regulated broker is pretty hard to find… not impossible though. You must be aware of the fact that some websites tell you that certain brokers are regulated even if they are not so make sure your information is correct. Keep in mind that some BOBs have a good reputation although they are not fully regulated; our Recommended Brokers section will give you more information.
The Bottom Line When Comparing Brokers
There is no single or best way of comparing brokers. As you can see, there’s a multitude of factors which must be taken into consideration when deciding to open a Binary Options account with a broker. Maybe broker X has small fish, but broker Y has a great platform and excellent returns; it all depends on what you are looking for, what has more weight for you and last but not least, it depends on what type of trader you are. However, it would be wise to disregard any factors like a cool name of the broker, the beauty of the girl in the Live Chat picture (or home page), promises of quick profits or gut feeling. And don’t forget to take the time to read our review on the broker with whom you are considering depositing.