Which Binary Option Broker to Choose?
Given the nature of the binary option trading industry, it’s safe to say that your choice of a binary option broker is perhaps the factor with the greatest impact on your profitability and chances of success.
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Despite ever-increasing regulation, there are still rogue elements peddling their binary option deals, and unfortunately, there are still traders and would-be traders who fall for their schemes. In this article, we’ll take a closer look at some of the most important factors that you should take into account when looking for a binary option broker.
There’s nothing more important than regulation when it comes to trading binary options. Unregulated operators can essentially do with your money as they please, without any negative consequences for them. The best course of action is to steer completely clear of unregulated brokers. Does someone show you a superb bonus deal, with a great platform and unparalleled payout rates? If the said broker is unregulated, drop it like a hot potato. Proper regulation should be considered a must for every broker out there. How can these rogue operators still be in business though? They find various ways of getting traders to deposit. One such way is the popular auto-trading scam. If you’ve ever dealt with binary options before, you probably know these little monsters. They pop up everywhere, with their flashy 2-page websites, featuring greed-inducing graphics and fake countdown timers signaling the impending end of their offer. Such sites are largely built around marketing videos in which several actors do their best to sell you the trading software, that will make you tons upon tons of money on autopilot. Those who fall for such scams will soon find that their “software provider” forces them to sign up to a single broker (or two at best). There’s no surprise in the fact that at a closer look, these partner brokers turn out to be unregulated.
There are several regulatory jurisdictions and several regulatory bodies. The strictest laws in this regard can be found in the US. The US does not allow binary option trading in its European form. Brokers who score a US license, are therefore some of the most serious and reliable ones.
In Europe, CySEC (Cyprus Security and Exchange Commission) regulation is the most popular. While every country has its own laws and financial regulatory authorities, most binary option brokers are based in Cyprus and are therefore CySEC regulated. A CySEC license is not a meaningless and easily-dispensed document though. All those covered by it have their activity governed by the EU’s strict MiFID directives. One such operator is Banc de Binary (or BdB), who have picked up their CySEC license in 2013.
Age of the Broker
How long a broker’s been online is also quite relevant when it comes to establishing its reliability. The binary option community is large and quite vocal online. If someone is scammed, you will definitely hear about it. If you are dealing with an operator like Banc de Binary though, online since 2009, and you do not find more negative information about it than the usual white noise (created by disillusioned traders who ended up losing their rolls on account of their own poor trading practices), you’re looking at a trustworthy operator. That is not to say that younger brokers should be instantly dropped. Veterans like Banc de Binary just carry much more credibility.
As a binary option trader, you’re directly impacted by the return percentage on your trades. Some brokers offer around 70-75% returns, while others go as high as 90%. In the case of Banc de Binary, the maximum on the returns is as high as 91%. What are these returns? In binary option trading, trades that finish ITM (in the money) yield a certain return, on top of the initial investment. Obviously, the higher this return is, the better it is for the trader.
This is only an important factor for beginners. Advanced traders know all too well that the more money they deposit, the more profits they stand to gain. It takes money to make money, indeed. For a beginner though, the initial deposit is important, because beginners do not usually have a lot of money to spare and invest. At Banc de Binary, this minimum has been set to a very attractive $250. There are brokers out there who accept $100 deposits too, but $250 isn’t just very reasonable still, it also gives one a much better chance to beat that nasty initial variance.
The Trading Platform
Where and how you do your trading is important obviously, not so much from a visual perspective, but rather from the point of view of the trade-types you can make. Besides the classic Put/Call options, there are One Touch, Boundary and Ladder options available at Banc de Binary too. Every one of these trade-types offers traders different strategy-opportunities.
The Minimum Trade Amount
Being allowed to invest as little as possible per trade is extremely important from the perspective of money management. After a while, traders will want to make bigger investments, but in the beginning, fine-tuning one’s money management may well be the difference between success and failure.
The bottom line
With a minimum investment of $1, Banc de Binary fits the bill of the perfect broker. It may well be taken as a template for how one’s ideal binary option broker should shape up.