Binary option trading has become one of the most popular investment techniques in the market today. It offers many features that appeal to the novice as well as experienced trader, and it is a simple system easily understood and put into play.
As with all innovations, once one company has proven successful, you can be sure there are tens of other competing companies waiting to jump on the bandwagon. So with so many trading companies peddling their wares how is one to choose where to go? What does one trading enterprise offer that the others don’t? Is one more profitable than the others? Does one provide better technology? Bonuses? Security?
If you’re confused by all of the binary options brokers popping up these days, you’re not alone – and this article will help you separate fact from fiction.
Comparing Binary Options Platforms
Even a quick look at a few binary options brokers will show unequivocally that they all seem to offer relatively similar offerings. Most boast a high potential for ROI, usually somewhere from 75% to 90% of the investment. But the similarities don’t just end there. What many traders are surprised to find out is that many binary options brokers actually offer identical technologies, just in a different packaging. In fact, there are a few companies that peddle their binary options trading platforms, and all of today’s top binary options platforms use one of these technology suites to bring trading abilities to the masses.
Though it’s hardly relevant to the individual trader, the top binary options platform options include (in no particular order) SpotOptions, Tradologic, TechFinancials, TradeSmarter and MarketsPulse. All of them claim to offer cutting edge technology for both the trader and the binary options broker. Similarly, all the sites listed user-friendly platforms, unique trading features and professional risk management. Our research indicated that all of these companies also offers mobile trading applications which allow the trader to be on target every minute of the day, though not every broker chooses to launch their mobile platform from the get-go.
There are no binary options brokers that will tell you openly which technology they use, but if you aren’t satisfied with a specific broker because of its execution, you should research this issue and find a broker powered by another company.
The Binary Options Brokers Themselves
One thing that differentiates different binary options brokers is the way in which they manage their clients’ risk. To this end, more and more brokers are beginning to offer some sort of compensation for failed trades.
Anyoption, for example, which seems to be one of the only binary options companies that has its own proprietary trading platform, has an interesting feature whereby a trader will always come out with some money—even if he made the wrong investment decision. Anyoption pays out between 65-71% of the money invested for options expiring in-the-money and even shells out a 15% refund for those expiring out-of-the-money. An investor is guaranteed to always receive a payout.
TradeRush, which is powered by SpotOption, offers up to a 10% return on losses, while 24option does not offer this solution. If you’re concerned about losses, you can consider what each binary options broker offers as an ‘insurance policy’. One popular option is a rollover feature, where traders can extend their trades if they see it looks like it may close as a loss. This feature is offered by TraderXP, ZoneOptions and other brokers. These features are not dependent on the software that powers each broker, but on the broker’s decision as to whether they want to offer such policies.
There are, of course, a few standout features that make some binary options brokers stand out from the crowd. TopOption, the binary options broker that is operated under the same umbrella as leading Forex broker Markets.com, has recently introduced its innovative advance expiry types whereby a fast, aggressive trader can choose a short expiry option and a long-term trader can choose a monthly/end of year expiry.
Free demo trading accounts were provided on most of the sites, something that is a bit of a turnoff for the industry as a whole, but provides a distinct advantage for those that do offer the free demo, such as 24option, powered by TechFinancials, and Banc De Binary, which is powered by SpotOption.
Stockpair has developed an entirely unique trading platform. Within this trading platform, traders can choose stocks from a list of stock pairs and binary options and stock pairs from a convenient drop down menu. Once a pair or option is selected, the trader can choose a position and invest anywhere from $20 to $6000. If a trade is opened for more than an hour, the trader can opt to exit early, whether he is in profit or loss. This is unique to Stockpair and is a great tool for any trader.
In addition, Stockpair offers a wider range of stock pair trade options than those offered by standard binary options trading firms. Traders can choose binary and pair options from seven stock exchanges in America, Europe and Australia, a wide range of popular currency pairs such as EUR/USD, EUR/JPY, USD/CHF and more all of which can be traded 24 hours a day.
When it comes to regulation, all the sites I visited claimed to be highly regulated and secure for all traders. However, Banc De Binary stands out as one of the only binary options brokers regulated by CySEC. TopOption, the binary options brokerage of Safecap Investments, which is the parent company of Markets.com, is also CySEC regulated. OptionWeb, a binary options broker that operates primarily in the French market (though they do have a website in English as well), is also regulated by CySEC as well as the Autorité de Contrôle Prudentiel de la Banque de France.
It goes without saying that traders of binary options should make an informed decision before choosing their brokerage. With this education should come the understanding that since most binary options technology is similar (if not identical) between brokers, having a responsive and customer-centered brokerage, as well as one with the trade options and assets that you want, is essential.