Binary options trading has become very popular (and under increasing scrutiny from the SEC and other government agencies). Due directly to that popularity, a very wide range of trading platforms have emerged. Some are worth your time, while others are costly mistakes waiting to happen. How do you ensure that you’re choosing the right trading platform for you?
Check for Registration
First and foremost, any binary options trading platform that works with US clients must be registered with the SEC. It is vital that you trade with a regulated broker. Of course, if you’re not in the US and your region doesn’t require regulation, then working with an unregulated broker isn’t that big a deal. If you’re in the US, though, it’s not an option. Verify regulation and registration before you do business with a broker/dealer. As a hint, there is currently only a single brokerage legally allowed to work in the US – NADEX.
If you decide to work with a brokerage that is not based in the US, then you’ll need to consider several other factors.
One very important factor in choosing a trading platform is how quickly you can withdraw your money. Some platforms have a specific time limit, while others have an amount that must be reached in the account before a withdrawal can be made. Yet others require that you have a specific number of investments made. The list goes on. Carefully scrutinize the details of the brokerage’s rules (and make sure to always read the fine print).
What’s the Software Like?
While you’ll work with a brokerage, you’ll be using that firm’s software for your binary options trading. That means you need to consider its performance, stability, ease of use and other factors. You want to make sure that the user interface is intuitive and easy to use, but that it doesn’t sacrifice capability for pretty graphics. You also need to ensure that it’s stable and secure, so that your information is protected at all times.
How well capitalized is the platform? This is vital consideration, as undercapitalization could put you in a very bad position should they end up going bankrupt, or if you manage to “win big” and they lack the funds to pay out when you want to withdraw your money.
Binary options investing is famed for the wide range of asset types available to investors. However, not all platforms will let you invest in all asset types. Verify what you’ll have access to before signing on with any platform. Make sure that not only are the asset types you want to pursue right now available, but that you can expand later to other types. Look for platforms that give you access to commodities, stocks, forex and more.
Reams of advice can be written on the subject of choosing a trading platform for binary options. However, if you don’t feel that you can trust a broker, they might meet all the qualifications and still not be the right fit. When all else fails, go with your gut. It’s usually right.
With a little research and a focus on these key areas, you will be able to find a platform that fits your investing needs well.