Choosing the Best Broker

Written by Miro Nikolov

Miro Nikolov

Miro Nikolov is the co-founder of TradingPedia.com and BestBrokers.com. His mission is to help people make profitable investments by giving them access to educational resources and analytics tools.

, | Updated: October 30, 2024

As you know, trading on the financial markets is becoming increasingly popular, and it is completely normal for products, involved in this business, to evolve. Every day new virtual markets are being created and that is why it is hard to keep track on the reliability and sustainability of those products. One of these markets are binary options, whose explosive popularity growth actually resembles the Forex phenomenon.

It goes without saying that all the new binary options traders who join the market on a daily basis will cause many new brokerage firms to enter the industry in order to tap the expanding customer base. This will make choosing the right broker to suit your needs even harder. Within the following paragraphs you will find some of the most significant aspects to take into consideration, while choosing your broker.

Financial stability

Capitalization is an important factor every future trader looking for a broker should take under consideration. You should make sure the broker you are going to choose is well capitalized simply because this will decrease the risk of bankruptcy. The easiest way to find out whether a company is well capitalized is to check if it is regulated. Regulated brokers cover a set of requirements that to a large extent ensure their financial stability. Also, regulated brokers are generally deemed more trustworthy and are less likely to delay payouts etc. Thus, you should consider depositing your money with a regulated broker, even though an unregulated one might be offering better trading conditions (higher payouts etc).

Payouts

Payout percentages vary between brokers. Return ratios are brokers main means to compete with each other. However, that does not mean that the market leaders will always offer the highest payout percentage on a given option. Often you will see newcomers offer considerably higher percentages as part of their aggressive strategy to gain market share. However, it is exactly the market leaders who are regulated, offer the best personal data security and will not delay your money withdrawals. Speaking in numbers, we recommend payout ratios of at least 70%, whereas you can receive a return of up to 90% on some instruments.

There are also payouts offered for “out-of-the-money” situations, which means that you can be compensated, even if you lose. So, apart from looking at returns it is always a good idea to also look at the payout rate when the trades are not successful. Some brokers might give you back up to 15% of the sum originally invested.

Assets

Different brokers offer binary options based on varying assets – currency pairs, commodities, stocks and indices. Each trader has unique interests and view over the markets and thus will want to trade different binary options, thus the greater the variety of instruments offered – the better.

Customer service

As with every other service you receive, customer support is a key factor when choosing a binary broker as well. For starters, you need to check the number of languages a broker supports. Next, you need to look for available ways to contact a customer service representative are find out how quick their response time is. The quicker the response time, the lower the chance is for you to lose money, if your connection goes down, or some other force majeure event occurs. You can understand a lot about a broker judging by the quality of its customer support.

Deposit Bonuses and Conditions

Most brokers, especially the most reputable ones, offer flexible conditions in terms of deposit and withdrawal methods, covering most of the major payment systems. As for the specific conditions tied to depositing and withdrawing funds, they are listed on the respective brokers website.

Often, brokers will compete with each other not only by offering a better payout ratio, but also by generously giving you a sign-up bonus, which can amount to 100% of your initially deposited money, in most cases under certain conditions. There might also be some trading promotions. In order to find out more relevant information on this topic, you might want to contact customer support once again. However, as we said earlier, better payout ratios, deposit bonuses and promotions, should not be the sole reason to deposit a considerable amount of funds (recheck the paragraphs above).

Trading Platform

There are several types of trading platforms on the market. Most of them are web-based, which is handy because you don’t have to install any software on your computer. Reliable Internet connection and a browser is all you need.

Binary options brokers offer different types of tools on their platforms and the user interface might vary a lot. Getting used to a new platform may require some time and practice and is best done on a demo account. The same goes for testing new trading strategies and tools.