Binary Options Scams
Choosing a binary options broker is not like choosing a Forex broker. Right now, binary trading is largely unregulated, which means that there is no simple registry where you can look up brokers and come up with a reputable list based off of the governing bodies regulations, inspections and audits. There are some independent websites that list reputable binary options brokers like www.binaryoptionsblacklist.com. You can use that site as a guide to see ratings and trader reviews of many of the brokers listed here and other popular binary trading portals around the web.
If for example you were looking for a FX broker, you could check to make sure that a broker was registered with the NFA. The NFA does not regulate binary trading (yet), and most binary options brokers worldwide are unregulated. The few who are regulated are generally based in Cyprus and are regulated by Cysec. These brokers may or may not be the best ones, so you will need some other criteria to help you make your choice and avoid binary trading scams.
Check into how well capitalized a broker is before you sign up with a company. A well capitalized company is much less likely to lose your money than one which has plenty of money for operations. Even though binary options brokers aren’t regulated like FX brokers right now, you can still find out whether a broker has $20 million in capital by checking with the Commodity Futures Trading Commission (CFTC). The website has a list of capitalized members.
Learn About Your Broker (Potential Brokers Before Trading
Learn about the restrictions which are placed on your trading activity with a particular broker. Do you have the option to trade with leverage—if so, how much? Can you trade as much or little as you want, or do you need to trade specific lot sizes? What are the payout options, and how quickly can you add or withdraw money? What are the payment methods that allow you to add funds to your account? Can you trade on your mobile device, or can you only trade on your home computer? Is the trading platform web-based or can you download it? At that rate, is a download required? Can you trade from anywhere? Is the platform intuitive and easy to use? Is the platform secure and encrypted by a 128 bit SSL encryption key? Does the broker have a lot of slippage? How wide are the spreads? Are there additional commissions and fees? What do other customers say about the broker?
Also test out the customer service department of any broker you’re thinking of using. You should expect customer service which is far superior to the service you’d get from a bank. It’s important you have 24/7 access to agents, and that they offer many immediate ways to get a hold of them including a phone line and a live chat screen. Test out the system by coming up with questions about the services or the platform and asking an agent. Find out how quickly you can get an answer and whether the team is helpful, friendly, and efficient. Hopefully you’ll never have a major issue with your trading, but if something comes up the last thing you want is an unresponsive broker who isn’t going to deal with your problem quickly; you want a broker which will help you to find a solution which will save you money.