Five Things to Consider When Choosing a Binary Options Provider

Five Things to Consider When Choosing a Binary Options Provider
Five Things to Consider When Choosing a Binary Options Provider
Five Things to Consider When Choosing a Binary Options Provider Getty Images

Traders who search for online binary options providers may be flooded with results, returning literally dozens of choices for brokers, as well as information on binary options that may seem conflicting. Many of the brokers found in an online search operate in lesser known places in the world. Today’s article will outline some things to consider when choosing a good binary options provider.

Regulation: A trader curious about binary options could find articles regarding potentially unfair pricing and practices of binary options providers. One concern is that only a few of these brokers are regulated by any reputable government agency. In the United States, the Commodity Futures Trading Commission (CFTC) is a regulatory body that regulates the futures industry. Reputable providers must submit themselves to oversight of proper practice and qualify themselves to be endorsed by the CFTC. Only a handful of providers have become regulated in the U.S. Traders should not settle for anything less than CFTC oversight to ensure proper practice.

Legal: Traders should not underestimate the importance considering legal aspects of their choice of provider. Binary option brokers outside the U.S. may be permitted to operate by their local authorities, but this does not make them legal in the U.S. A broker operating illegally could be shut down, leaving traders trying to fight for a return of their funds with authorities from another country.

Security of Funds: Some binary options providers easily accept deposits via credit card and other convenient methods, but fail to provide the with customer assurance as to where the funds are actually being deposited. CFTC regulations require that deposits be held in what is called a segregated bank account. This means that customers’ funds are distinguished from other funds, ensuring that the most reasonable steps to ensure financial protection have been observed.

Support: The importance of customer support is obvious. Traders should look for a binary options provider with a toll free telephone number, U.S. Address, and an email address. The provider should encourage clients to feel free to contact support. Traders should look for support representatives who will return calls and emails.

How to Exit Position: Traders will also find that not all binary option providers are equal when it comes to exiting a position. Some providers, once a position is entered, will not permit a customer to close that position at a profit or loss prior to expiration. Thus, a trader can become trapped in a position. With a little research, however, traders will find that not all providers follow this practice; providers are available that will allow customers to exit positions at gain or loss prior to expiration.

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