Selecting a binary options broker is one of the most important decision an individual investor will make over the course of his or her trading career. With so many providers out there, and such varying degrees in the quality of the services on offer, prospective investors need to take the time to carefully evaluate potential providers on the basis of several important attributes. In this article we investigate four of these attributes and explain why they should be central in any decision that involves the selection decision.
Range of Assets
The first thing you want to check for in a prospective service provider is the number of assets that it makes available for trading. The range varies widely across service providers — some have fewer than a hundred assets, while others have more than several hundred assets — but typically you will find that every service provider offers some combination of stocks, currencies, commodities and indices. It is worthwhile considering which specific assets that you would like to trade before choosing a service provider so that you can make sure your needs will be met.
Ease of Withdrawals
Some companies operating in the binary options industry have developed a bad reputation for the way they handle client withdrawals — reports of refusal to allow withdrawals and reports of taking an inordinate amount of time to process withdrawal requests are unfortunately all too common. For this reason it’s essential for investors to make sure that the withdrawal procedure used by their prospective service provider is transparent and effective. Before choosing a service provider, make sure you are provided with a clear, written document outlining the terms of withdrawals. Although most of the service providers in the industry conduct themselves in an ethical manner, it’s important that you screen for unethical (and damaging) practices.
The regulatory status of your service provider is a key consideration when make your selection. Some of the providers in the industry choose to operate without regulatory approval. While such providers may be capable of delivering a good quality of service, there are serious downsides associated with dealing with an unregulated entity. First and foremost, the protections available to you as an investor are severely limited in the case of dealing with unregulated service providers. Regulated service providers, on the other hand, must adhere to strict accounting and compliance policies in order to retain their regulatory status. In the event of a market meltdown, or should your service provider enter insolvency, only a regulated service provider will have any measures in place to ensure that its clients deposits are safe.
It may sound obvious, but a good way to filter out weak service providers is to read some of the online reviews and discussion forums in which people outlined their experience of dealing with that service provider. Although reviews can be instructive, make sure you approach them with a somewhat skeptical eye: you need to be able to discern reviews that were written by people who were genuinely happy or unhappy with the service from those that were written by people who failed to success at trading (which may have had nothing to do with the service provider). By scanning reviews, pretty quickly you will be able to filter out service providers who behave in an unethical manner.
As outlined above, investors should consider a variety of attributes when evaluating prospective service providers. The range of providers in the binary options industry is diverse, so make sure you find one that you are comfortable with, that provides a good range of assets, that offers fast and transparent withdrawals, that is regulated and that has generally positive reviews online.
Photo Credit: stock photo