How to pick your binary options broker

 

How should you pick the binary broker?

 

Based on the assets portfolio on binary options?

Of course, the higher the number the bigger your choice and the better for you.

 

Based on the return of the binary options offered by the broker?

Of course, getting 85% is better than 70% when you are in-the-money, and getting back 10% is better than losing 100% when you are out-of-the-money.

 

Based on bonuses?

Maybe, but you MUST know EXACTLY what a bonus legally means for your account and your money.

 

Based on the kinds of binary options?

Also, for the same reason: more choice means better choice (maybe).

I only tell you a couple of important things about this point.

 

“One Touch” options

Do you ask yourself why they are only “Touch” but not “No Touch”?  Why do you think the returns are so high but only if the assets touches the target price? Maybe because statistically the probability of “touching” is so low? Probably this is the reason. Our suggestion is not to trade One Touch binary options, because they are too biased in favor of the broker. In other words, only if the broker offers both the “Touch” and the “No Touch” version, on the same asset and for the same expiry, is the algorithm of the platform fair, in order to “protect” the broker profitability, and only in this case are the upper and lower target prices statistically balanced; if instead the broker offers only the “Touch” version (called “One Touch”), then there is a high probability that the platform has set the target prices (upper or lower) significantly far away from the market price (but not too far away in order not to deter investors), making statistically very difficult for the trader to be in-the-money. The extremely high return (300-400-500% !) is just a way to attract trades in transactions that will hardly expire in-the-money.

 

Past closing prices

The second word concerns whether or not the broker has a page in its website reporting the prices of the previous expiry times. If that is the case, the trader can compare the broker closing prices with the prices of the most important data providers (Thomson Reuters, Bloomberg, just to give two examples). All the serious brokers should have this service as a way to be fully transparent.

 

Let’s continue now with the way you should pick the broker.

 

Based on where the broker is legally located?

This is for sure an important factor: even if the binary industry is getting regulated just recently after the ruling of the CySEC (May 2012), the majority of the brokers are still incorporated in fiscal paradise, and knowing which jurisdiction will be in case the one settling a dispute with the broker might be relevant for you.

 

Based on the Terms & Conditions of the Brokers?

YES

 

Based on whether the broker is regulated or not ?

YES

 

 

In few words, you shall pick the broker mainly among those who are regulated and after having read the Terms & Conditions in full.

 

 

Go to next article "How to read the Terms & Conditions of Binary Options Brokers"