Secured Trading Environment 9. Questions to ask Before Opening an Account As trading in the financial markets becomes more popular, it is part of the natural progression for products and offerings to evolve.

New virtual markets are created. Binary options is just such a market. Believe it or not, binary options have only been around since when the Securities and Exchange Commission SEC approved this form of online trading.

It goes without saying, that with the emergence of new markets come handfuls of new binary options brokers offering the trading product.

Often unregulated these binary options brokers are an unknown entity. If you value your money then you would be right to be wary of the unknown. Binary options trading can be extremely rewarding for professional traders and newcomers, however, how do you know which broker to deal with and who can you trust with your money? What trading platform should you be using? These are some of the basic questions that you will need to confront before you take the plunge in the world of binary options trading.

In the Forex Market, trading with a regulated broker is often the most important factor when opening a trading account. By the way, some markets or regions are unregulated, meaning you may be better off with an unregulated broker if you are based in those markets. Sometimes, like in the US with their strict NFA regulation, trading can be no fun at all. Leverage offered is very low and highly regulated brokers can offer very low spreads. Also, just like in the case of MF Global who recently were all over the news, being regulated does not necessarily guarantee the safety of your funds.

Nevertheless, how a broker is regulated depends on where it is registered and where its base of operation is.

This can be a complex issue especially when you are dealing with a global market. The financial market is largely an Over The Counter OTC market and this makes it difficult to subject a particular company to a specific set of regulatory framework. This is because most retail traders or investors are unlikely to conduct their own research into the feasibility of investing in a particular investment vehicle. In short, the broker is supposed to act in the best interest of their clients.

However, when the broker is also the Market Maker, ie. In the United States, brokers are self-regulated by the Financial Industry Regulatory Authority FINRA , a self-regulatory organization of the brokerage industry and the Securities and Exchange Commission SEC. For those brokers that are based in the United Kingdom UK , the task of regulating brokers falls under the ambit of the Financial Services Authority FSA , a quasi-judicial body. Individual member states of the EU have their own respective regulatory bodies that follow the recommended legal framework standards established by the European Union.

In a perfect world, the above scenario is supposed to be the case. Unfortunately, the global financial crisis that resulted from the collapse of the U. Every week there are ten new brokers popping up. The regulated ones are usually based in Cyprus and so regulated by Cysec with registered offices in the BVI. So, it seems that in this market, regulation is not one of the governing factors to choosing your broker. Another factor in the selection of a broker is to look at their market capitalization.

The Best Binary Options Brokers & Trading Platforms

It is always prudent to ensure that the broker shortlisted by you is well capitalized to minimize the risk of losing all funds if the broker does go bankrupt or if you have placed a big winning trade. When a company is regulated you know that they are well capitalized, they have to have millions of dollars in their accounts to even apply for regulation. S led to many of them having issues with their clients money when the market tanked.

However, recent regulations have been tightened in the U. This requirement is monitored by the National Futures Association NFA in conjunction with the Commodity Futures Trading Commission CFTC. To check whether a firm is sufficiently capitalized, you can refer to the CFTC website. They have a list which shows the capitalization of their members that is updated on a monthly basis.

However, it should be noted that many Forex and binary option firms have difficulty in meeting this requirement and are forced to relocate their operations outside of the U. Nevertheless, as retail trading in the financial market is becoming more popular and legitimized, many countries in the EU are also following the footsteps of the U.

S in terms of capitalization. In this respect, capitalization is becoming less and less of an issue which a trader has to worry about. This means that even if they lose out on an elephant trade they can afford to return your profits.

Some brokers also take the other side of a very large trade by trading it at another brokerage house. This guards the company from losing too much in one trade. Ensuring the capitalization of the firm is one very important factor to consider when doing your broker research and selection.

There are many types of trading platforms on the market. With binary options, most of them seem to be web-based. A lot of them are white labels of other companies platforms where they have taken their own branding such as logos and placed it on the platform ie. SpotOption and Tradologic platforms. Binary brokers offer different types of vehicles on their platforms. Very simply you choose the market movement at a set expiry and whether the asset will have travelled up or down at that expiry.

Banc De Binary Review | Best Binary Options Broker

What to look out for here? Ideally you will have a chart available to look at before you choose the asset type. This will make your task easier and quicker. The next platform offering is One-Touch. Your trade depends on whether you think the asset will touch a certain point by a set expiry time or not. The line is often far away from the charts trend. Just like in the picture:.

Boundary trading or Range trading is assuming whether the asset will stay within a set range or outside of that range by the pre-set expiry time. Some brokers even offer Second options.

This is a very desirable new trading type with a quick turnaround. With all of these option types, look for companies that offer charts with a good history timeframe, ranging back at least a week. Look for a company that has very little down time on their server or slippage. Slippage is the time between placing the trade and execution of the trade. Seconds can make all the difference, especially when trading the Second options. So what is the main difference between a Web Based Platform and a Non Web Based Platform?

A web based platform is totally independent of the computer which a trader is using to trade with. Non Web Based Platform normally requires users to download a piece of software before they can start trading. What this mean is that a trader will need to trade from that specific computer.

If the computer that a trader is using is a desktop, this would mean that the trader cannot trade from anywhere in the world. In other words, he is not mobile. Your account opens so you can keep an eye on your open positions, execute a trade and deposit funds. If the trader makes the correct determination, he will be able to reap a percentage return based on the amount of money invested.

However, this percentage return varies from broker to broker, the asset traded and the expiry time selected. Some brokers calculate this return based on the real time market price of the underlying asset while some brokers use their own proprietary algorithms to calculate this return.

The main disadvantage with binary options is that when your trade is even out by one cent from the predetermined price, you will be out-of-the money. Hence, apart from looking at returns, traders should also look at the rate of payout when their trades are not successful. If you are an experienced trader, what do you like to trade? Binary Options trading is very flexible and as such traders can benefit from the volatility of the Forex market while at the same time minimize their risk.

In this respect, you can indirectly tell whether a broker is serious about their business or not. The general rule is; the more populated the list, the more serious the broker.

Customer service is key! Check out the amount of languages offered by the trading platform. How can you contact the customer services representative? How quick are they to respond? The level of the customer service is often a key indicator as to the quality of the company. Send them an email, and see how quickly they are to respond. Get on the live-chat and ask them a question about their trading accounts or welcome bonuses. From these interactions you can get an idea of how serious the broker is and how much they value their clients.

Most binary options brokers offer welcome bonuses and trading promotions. Be sure to ask your customer service representative what they are currently offering. Also find out the trading conditions which apply to that bonus.

What trading volume must you reach before you can take it? By secured trading environment, we are talking about how safe is it for you to be conducting your trading on the internet. This security issue is not just specific to binary options trading but affects all forms of web based transactions. If your transactions are not encrypted, you will subject yourself to hackers can steal your financial data. From time to time traders complain to me off scams they have dealt with when using a specific brokerage firms, I have looked into most of these and found them to be that trader was unhappy at losing his funds too quickly.

Of course scams happen within any market, so move slowly. Deposit small amounts to start. Test the withdrawal processes and then once you are sure of the legitimacy of the company, deposit bigger over time. Just like with your trading strategies and your risk management strategy choosing a broker should form part of this process.

Binary options trading has many advantages over other trading types. You can know initial payout or risk even before you place the trade. FX Empire - the company, employees, subsidiaries and associates, are not liable nor shall they be held liable jointly or severally for any loss or damage as link result of reliance on the information provided on this website.

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As such prices may not be accurate and they may differ from the actual market price. FX Empire bears no responsibility for any trading losses you might incur as link result of using any data within the FX Empire.

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How to Choose the Right Binary Options Broker for You?

Expand Your Knowledge Basic Education Advanced Education Live Webinars Financial Glossary Financial Podcasts. Forex Brokers Binary Options Brokers Brokers Bonuses Social Trading How to Choose a Forex Broker Best Forex Brokers. Signals Performance Days Trial Plan Monthly Subscription Plan 3-Months Subscription Plan Free Signals - Learn How Futures Signals. How to Choose a Binary Options Broker Table of Contents 1.

Conclusion Introduction As trading in the financial markets becomes more popular, it is part of the natural progression for products and offerings to evolve. Regulations Company Capitalization Trading Platforms Broker Types Customer Services Regulation In the Forex Market, trading with a regulated broker is often the most important factor when opening a trading account.

Trading Platforms There are many types of trading platforms on the market. Just like in the picture: Web Based or Non Web Based Platform So what is the main difference between a Web Based Platform and a Non Web Based Platform?

Payouts Offered Below is a list of features that you should look for before making your selection. Payout for out-of-the Money Trades The main disadvantage with binary options is that when your trade is even out by one cent from the predetermined price, you will be out-of-the money.

Assets Offered If you are an experienced trader, what do you like to trade? Support Multiple Currencies Trading Binary Options trading is very flexible and as such traders can benefit from the volatility of the Forex market while at the same time minimize their risk. Customer Service Customer service is key! Secured Trading Environment By secured trading environment, we are talking about how safe is it for you to be conducting your trading on the internet.

Questions to ask Before Opening an Account Before choosing a broker, be sure to ask the following questions: How well capitalized are you? Who takes the back-end of your trades? Are my trading funds kept in a separate, secure client account? How can I deposit funds? What welcome bonus will I get? How long do withdrawals take?

Do I have to pay for withdrawals of my funds? Conclusion From time to time traders complain to me off scams they have dealt with when using a specific brokerage firms, I have looked into most of these and found them to be that trader was unhappy at losing his funds too quickly. Ask all of the above questions and test out the customer services department. But remember, a careful trader is a happy trader. TOP BROKERS BY Reviews. ABOUT US PRIVACY POLICY TERMS OF USE CONTACT US ADVERTISE WITH US BECOME AN AUTHOR GET FINANCIAL CONTENT FXEMPIRE'S ARCHIVED POSTS.