When you are choosing any financial advisor there can be a fine balance in making the right decision. Essentially you need to know enough to make an informed choice but leave enough room for using a professional to be worth your while.
For investors looking to select a broker for their binary options trading this basic principle still applies, and if you know the basics you will be able to choose wisely.
Brokers and binaries
Binary Options, also known as fixed-return options and digital options, have been increasing in popularity due to the simplicity of their approach to trading.
The element of stability offered by the two possible outcomes in a trade, the so-called ‘all or nothing’ factor, means that some investors favor the method.
However, as with any growing trading sector, there are plenty of choices for actually making binary options trades.
All decisions that involve handing over any degree of control of your money must be made by taking a certain amount of ‘due diligence’ into account.
Building a relationship on trust can only be done after undertaking some initial homework to weed out any scammers and risky players.
For those just starting out, choosing a platform that is free can be a major plus point. Also, using a web-based brokerage that doesn’t mean downloading or installing any extra software can make it a lot easier to get up and running.
One of the big attractions of getting involved in binary options trades is that payouts are determined in advance when the buyer enters into a contract. So choosing a binary brokerage that offers a good rate of return is an important part of your decision and you should look for one that offers at least 65-70%.
Binary options that expire “out of the money” can be hard to find but it is a very useful feature of some brokerage platforms and therefore well worth searching out. Essentially, this involves a pay-out on options that expire out-of-money, being a kind of ‘loss leader’ inducement towards traders and investors.
Although you most likely want to trade in dollars, choosing a broker that supports different currencies indicates that it has an international presence. At the very least, you should look for a binary options broker that deals in US dollars, the Euro and British Sterling.
Any process that deals with your money must be safe and secure and this is even more of a concern when it comes to online transactions.
Choosing a binary options broker that employs good security measures must be high on your agenda and be a primary factor in any decision you make. Strong encryption is the key for any online activity that needs to be secure, and binary options platforms are no exception.
Using 128-bit SSL encryption provided by a market-leading security company should be a basic requirement. Online identity theft is not only potentially catastrophically damaging, it is also one of the fastest growing crimes across the world.
Finding the right broker
Being armed with the knowledge you need to make an informed decision is a big part of the process, but you can only actually go ahead and choose a binary options broker if you then know where to look.
Obviously, as with many other things in life, asking friends or family who may already be involved in successful binary trading can be a great place to start. Word of mouth recommendations can still play a vital role in the increasingly technological world we live in.
Fortunately, if you don’t already know anyone involved in binary trading there are trusted and established online portals that can supply you will all the information you need.
Getting involved in any new method of making investments can be an exciting thing to do and that is why binary options are proving so popular and drawing in more people every day.
A good broker will only require a small deposit before letting you open a trading account for free, so make sure you look for any signs of overcharging that should set your alarm bells ringing.
Appropriate expiry periods are another thing to take into account, as they can range from minutes to weeks. Payment options are another variable that can determine whether a particular broker is right for you, as you might wish to use PayPal, bank transfers or credit cards for payments and withdrawals.
Above all, once you have the basics covered you can choose a binary options broker with confidence and get on with the actual trading.