With so many binary options brokers on the market these days it can be hard to distinguish the differences between them. If you just want to get trading then you simply need a broker that offers a reliable platform, decent returns and provides you with good support should you need it.
On the surface most brokers will offer this. A quick visit to any broker website will see them proclaiming their features and facilities as the best. However behind the gloss of their marketing and promotions, is there actually any difference in what they offer?
Here we take a look at some areas where there can be a real differences between binary options brokers and what to look out for when making your decision.
1 The No 1 Important Difference – Not all Brokers Are Regulated!
The key most important difference that you need to be aware of between brokers is their regulatory status. Not all brokers are regulated. It is important, if you can, to pick a regulated broker to trade with. This will provide you with some protection for your account. For example your deposited funds will be safe should the company end up going to into administration. Furthermore you should also expect a better experience in your dealings with the broker.
The vast majority of brokers on the market these days are regulated, with the majority falling under the watchful eye of CySEC (Cyprus Securities and Exchange Commission). Those that aren’t tend not to be for a reason. This is due to their desire to attract US clients. If you are a US trader then you will have to forfeit regulation.
This doesn’t necessarily mean that your broker is going to cheat you and there are indeed some good brokers that are not regulated. It will mean however that you are not entitled to regulatory protection and could lose out as you won’t have any protection for funds deposited with them.
2 White Labels
The complexity of binary options software means that most brokers will make use of ‘stock’ trading platforms. These are known as ‘white labels’ in the industry. What this really means is that these brokers offer the same pre-packaged trading platform, only differentiated by their personal branding and livery.
While brokers offering these platforms will offer the same core technology, some of the available features can be customized. Additional advanced trading facilities can be added for clients if the broker wishes to implement them (at a cost to the broker). Some for instance don’t offer mobile versions of their trading platforms.
The top white label brokers will offer the greatest amount of features and customization on their platform. SpotOption and Techfinancials are two of the most frequently white labelled platforms.
3 Option Types
One area where brokers differ is in the option contract types that they offer. By definition all binary options brokers will offer the higher/ lower contract. However the range of contracts that can be traded in binary options does not end there. Touch, Boundary, Pairs and Ladder options can all be found in the binary options universe. On closer inspection you will find that not all brokers (or their platforms) make these available.
It is also worth paying attention to the expiry times on contracts offered. Some brokers offer a good range of fast expiry times as low as sixty seconds, while others will focus on providing longer term contracts. Typically these are often set to expire at the end of the day or week. In some instances you can also trade contracts that expire at the end of the month.
4 Assets Offered
Before you sign up with a broker you will also need to check the range of assets that it has to offer. Here even those offering the same core platform can differ greatly. Some offer a better range of Indices, others a greater offering of Forex pairs, while others a good selection of commodities.
The Asset Index listed on the brokers’ website is the place to check what they cater for. However be sure to check this against what they have actually available on their platform. Many are not good at keeping these lists up-to-date. You want to be sure that they actually offer the correct contracts and expiry times that you want before committing to an account.
5 Promotions
One of the main ways in which brokers try to differentiate themselves from the competition is by the use of promotions. Free eBooks, risk free trades and account deposit bonuses are just some of the techniques that may be used to stand out from the competition.
High level VIP accounts often add to what is on offer. These may add further features including free withdrawals, faster processing times, additional bonuses and even higher ‘in the money’ returns than a standard account. These features tend to come at a price however. Generally you will need to make a higher deposit into your account to gain access these features.
6 Support
One important area of difference between binary options brokers is support. While this is not often mentioned it can be the difference between a good and a bad broker. The support offered varies greatly and will depend upon how interested the broker is in keeping their clients sweet.
Providing good support costs money. Only a decent broker will be keen to invest in this area. While you may be lucky and never need to use a broker’s support, if you do you will be thankful for choosing one that is strong in this area. Look for a variety of support types such as email, online chat and direct telephone numbers. Also ensure that you check the languages that the broker supports if you want support in your native language.
While on the surface many brokers appear there are a number of real differences between binary options brokers. Depending on what you criteria is for trading you should be aware of these when it comes to picking your broker. Look out for a broker that offers you the key things you need for successful trading and always trade with a view to reducing your risks.