A trader should use the following metrics to select a suitable binary options broker to trade.
- Company’s headquarters
Professional traders prefer to open trading account with a binary broker having their head office in a reputed jurisdiction. Jurisdiction reflects the commitment of a broker in providing trustworthy financial services. However, it should be noted that there are good and bad brokers in any kind of jurisdiction. It should not be the only criteria for selecting a broker.
- Free demo account
A binary options trader should get a feel of the platform before investing in binary options trading. In this regard, a demo account is a must to practice and gain confidence. A broker who offers demo account without any kind of terms and conditions is always preferred.
- Years in business
Business experience, to a certain extent, indicates the trustworthiness of a binary options broker. A cheating broker cannot continue in business for a long period of time. Thus, a broker with years of experience in business should be a natural choice of a trader while opening a binary options trading account.
- Deposit and withdrawal time
A reputed broker will never delay deposit and withdrawal requests. As a general rule, a broker who does not credit the trading account within three days after deposit should be discarded. Similarly, a broker who does not process withdrawals in five banking days should be avoided as well.
- Payout percentage
A payout percentage between 70% and 80% is a must to succeed in binary options trading. Those brokers who are offering anything less should be kept as
the last choice for opening a trading account.
- Deposit restrictions
The minimum and maximum deposit accepted by a binary options broker should be taken into consideration while opening a trading account. Mostly, binary
brokers will not have any restrictions on the maximum deposit. However, there will be stipulations on the minimum deposit amount. A broker calling for a minimum deposit of $300 or less is ideal for a new binary options trader.
- Position limits
To mitigate risk arising from huge positions taken in a single direction by a majority of traders, a binary options broker usually places restrictions on the maximum investment in an individual asset. A position limit between $500 and $1000 in a single asset is always preferred.
- Reference price
To verify whether there is no price rigging on the binary options trading platform, a trader should look for the reference price used by the broker. An honest broker would clearly provide the basis of calculation of the reference price. Some brokers directly use the Reuters data feed, while some use price average from two or more sources.
- Trading platform
The trading platform of a binary options broker should allow transactions to be conducted without any hiccups. Thus, a trader should assess the stability of the platform before opening a real trading account. A demo account would assist a trader to assess the trading platform of a binary options broker.
Invariably, all binary option brokers run some sort of promotions to attract new clients. The bonus is one among them. A trader should read the fine print before accepting any kind of bonus from a binary options broker. Bonus conditions usually restrict withdrawals before the completion of a certain amount of trading volume. Thus, a trader should avoid high bonus offers.
- Deposit modes
Each and every trader will have their own preferences when it comes to the mode of deposit. Some traders may prefer credit cards, while others would prefer making deposits through ecurrencies or cryptocurrencies. Thus, a binary broker accepting deposits through a wide range of funding channels is always preferred.
There are traders who would like to capitalize on the movement of any kind of asset (equities, commodities, currencies, bonds, indices, bitcoin, etc.). Thus, a binary broker offering a wide range of assets is always a top choice for opening a trading account. It enables a trader to invest in an asset where the price action is concentrated.
- Options range and expiry periods
A binary options broker offering different kinds of contracts (one touch, no touch, long-term, ladder, etc.,) for trading is always a favorite among the traders. It would enable a trader to choose a contract which suits the personal trading style and aspirations. Similarly, a binary broker providing contracts with a range (30 secs to one month or more) of expiry periods should be given priority while opening a trading account.
- Copy / social trading
Copy / social trading facility enables a beginner to keep in touch with the established traders. Apart from guidance, the facility allows a trader to keep the morale high. Thus, it is advisable to select a broker who offers copy / social trading facility.
- Customer support
A trader should never feel that he is let out in the dark by a broker. The customer support executive should respond promptly and show willingness to resolve issues without delay. Only then a trader can concentrate on trading. In this regard, an individual, before opening a trading account, can have a chat with the customer support department of a broker to assess their quality of service.
- Mobile trading
It is quite impossible to have our eyes glued to the computer screen on a 24×7 basis. At the same time, a trader should not miss a good trading opportunity just because he is traveling. In this regard, a trader should opt to sign up with a binary broker offering a mobile trading facility.
A trader who selects a binary option broker after careful consideration of the above discussed points would be able to trade without unnecessary diversions.