New entrants to the online retail binary options market spring up like mushrooms on almost a daily basis. To the untrained eye most of them look the same, offering more or less the same services so one might be led to believe that who you choose to trade through is not that important. That is a totally wrong assumption and you should never trust the first broker you stumble across with your money. If you want to be a successful trader you have to be a careful, proactive and wise trader first. So devote the time to do your research and do the right benchmark comparisons before you commit to opening a trading account, even a demo one, and before parting with any money by making an initial deposit.
Some degree of uniformity across the online retail binary options market does exist and as the industry moves further into regulation this is expected to grow, however there are still distinct differences between brokers and you should take full account of them as they form the core factors that would sway your decision against or for a specific broker. So, let us have a look at the main such differentiating factors:
The first and most obvious and perhaps easy to spot difference between binary options brokers is that they fall into two main categories; those that are regulated and those that are not. Although regulation does not by default and on its own make a broker great, it definitely means that it makes it safer to trade with, since being regulated by a pertinent authority in one or even many jurisdictions, forces a broker to adhere to certain rules especially when it comes to the rights of traders and it also gives traders a higher authority to resort to in the case he/she has a complaint against a regulated broker. We do not trash unregulated binary options brokers altogether, because there do exist some quite reputable firms which still choose to remain unregulated, however as a general principle we would say that, especially the novice, inexperienced traders, are much better off when they choose to do their trading with brokers that are regulated rather with those that are not.
Own platform or White Label?
The second major difference between brokers pertains to the platform technology they use to operate. The two categories here consist of those brokers who have developed their own unique, proprietary platform and those who are in essence white labels using the platforms developed by the handful of platform providers in the financial markets. The vast majority of binary option brokers are white labels of such providers, such as SpotOption, TradeSmarter and TechFinancials. The white labels category is also further divided into those “lazy” brokers who simply throw their name on a generic pre-designed platform and those who are committed and put in the effort and time to customize and tailor make the initial platform as much as possible, thus differentiating their offering and providing a much better service. Being a white label is not bad; you may not score high in terms of innovation and uniqueness but you have the added advantage of using a technology that is proven and reliable plus having the backing of the platform provider as well. The determining factor here then is whether a white label is serious, committed and hardworking enough to actually enhance the trading experience within the existing platform technology.
Type of Options available
All binary options brokers offer the traditional type of binary options trading known as High/Low, Up/Down or Call/Put. Besides this straightforward type however, others have developed over time, having different expiry times, different features and of course different payout levels. Some of these other types of binary options trading are much riskier, others are more complex and each is better suited to specific investment portfolios or trader mentality and more appropriate to different volatility levels in the market. The most widespread of these types are one touch, boundary, ladder and pairs, while others also exist. However, not all brokers offer all the types available so if you are after a specific type of trading then you should first check that the broker you are considering offers that particular type or not.
As mentioned above, expiry times are another factor which is different between trading types but it could be different even between brokers that offer the same type of trading. For example, among brokers offering high speed or turbo trading in binary options, there are those who offer this as 60 seconds trading and even those who have much shorter intervals even down to just 15 seconds. At the same time, with some brokers the longer expiry time might just be the end of the day, while others offer much longer options of up to a month or even longer. Indeed, this is a factor often used by brokers trying to differentiate their offering and thus it is not uncommon to find brokers who are white labels of the same provider offering exactly the same trading types but having very different expiry times. Again then your decision here should be based on your needs and preferences, so compare what is on offer and choose the broker offering the expiry time that suits you best.
If you want to trade a specific asset then your first step would be to check whether that particular asset is included in the tradable assets index of the broker you are considering. The assets offering is another field differentiating brokers from each other. In principle most binary options brokers will claim to offer assets from across the four categories of commodities, stocks, indices and currency pairs. However, some don’t cater for all the categories while the offering of others in specific categories is not as rich. Another problem, especially with smaller brokers, is that although they list an asset as being available on their website, once you open an account and you access the trading platform you discover that certain assets are not actually available for trading. To avoid such problems always check the assets list before you make a deposit with a broker and if you are very specific about wanting a particular asset, ask the broker to confirm that asset is definitely available before you open an account.
Perks, promotions and bonuses
Binary options brokers know they operate in a highly and fiercely competitive environment and they are completely aware that they need to actively differentiate their offering in order to stand out and attract the attention and eventually the custom of potential clients. Their best bet in achieving this is through the various promotions they put out, the bonuses schemes they devise and the perks they associate with the different account types they offer. As a general rule, the higher the amount of initial deposit you are willing to invest the greater the perks you are granted to receive including faster and cheaper withdrawals, higher return rates on trades and higher welcome bonus percentages. Moreover, other VIP treatment, premium perks include better and more exclusive access to personalized training opportunities, which could be very useful especially for first-time traders so make sure you compare such offerings before you take your final decision about a broker.
A final word
If you started reading this post thinking that all binary brokers are more or less the same you are bound to have reconsidered this view by now. So, knowing that differences do exist here is a final thought: behind each binary options broker there is a team of people and it is them who actually make the greater difference; their skills, competencies, knowledge, but above all their behaviour, their culture, their ethos, their zeal, commitment and enthusiasm and whether or not they respect, value and take care of their most valuable asset, their clients. This has to do with much more than a good reputation and a high standard of customer service through a prompt, reliable, accessible and polite customer service department, but of course these are greatly important too. Thus, before you decide and after comparing the factors mentioned above, it would also be very wise to take some time and search the internet to find out how other traders rate their experience with each broker and use their good or bad experiences as a further guide to reach your final decision. Good luck and as always the team here at binaryoptionswire.com is always here to assist you further.