The Securities Exchange is a place where you can win really big money. Anyone can invest on it, however, in order to trade on their own one needs to have special authorizations. They are very hard to acquire so to make binary options trading possible the mediation of a broker is needed.
The current economic situation makes everyone who has free cash try to invest. Bank deposits, however, bring the yield on the level of inflation, which is practically speaking, zero. Bonds, while they give more money, have a fairly low liquidity and it’s hard to cash them in at the time of lack of funds. Binary options are a financial instrument of which popularity has risen in recent times. They are derivatives which invested adequately bring a profit of even up to 80 percent. This happens because they utilize the financial leverage effect in which a small investment of cash brings a large return. Binary options trading is not complicated, that’s why people who have not previously played the stock market turn to them. Especially with these people in mind was this tutorial made. Here’s some advice on where to start the adventure in the stock market and how to choose the appropriate binary options broker.
Who is a broker of binary options?
Broker, as a concept in the financial and capital markets, has many meanings depending on the context. In the case of binary options the broker is called an intermediary, a specific entity acting on behalf of an investor in the stock market. Brokerage firm may have a various legal status, because the law does not specify that. Works always on someone else’s account on behalf of a person buying and selling options. Does not give advice, does not decide, only listens to the commands of the trader. Brokerage houses also run the so-called brokerage activities, buy and sell securities on the stock exchange and manage financial instruments for the account of its clients. In the same way as the brokers, the charge a fee for their services based on the size of the transaction. However, unlike them, they do not manage special platforms on the Internet through which one can buy and sell binary options.
What to look for when choosing a brokerage platform?
On the Web you can find both positive and negative reviews of different brokers. There’s plenty of them on the forums. In practice, however, more people seem to have a negative opinion than a positive one. Beginner market players, looking for a suitable place to trade binary options, check the reviews of other traders and read their reviews about platforms. One should not rely only on these opinions when opening an account, because they are often very subjective and emotional. It is worth it to take a closer look at accounts on different platforms, and, above all, visit various web pages of the brokers and compare their offer with each other.
Not every broker operating on the market offers the same amount of functions and assets since the platforms can significantly differ from each other. Very important for online trades is the quality of the service, that is the fact if in case of problems one can contact customer service in one or several ways. One should also take a look at how the account operates like on the inside, because as it is known, some are less intuitive than the others. The big advantage of brokers is the offer of demo accounts, but not on every platform they are free. Some brokers require clients to fill out surveys or allow free use only for a short time.
Binary options demo account – why is it worth it
Demo accounts make it easy to understand how to use the brokerage platform. They also help to learn the terminology, ins and outs of the options market and, above all, allow to play the stock market without risking your funds. Their biggest advantage is that the investor can see the operation of the account with a given broker. There is no need to sign agreements or to declare any future choices, the investor simply checks the quality of service “dry”. A demo account will give an excellent opportunity to test different binary options trading strategies. Thanks to the fact that this is done without the involvement of real money, one can check whether the risky move is profitable or not.
When using the demo account one should be aware that not every strategy will work on any platform. This is because of the technicalities, server’s speed, and delays on the market. Therefore, if the investment plan works and is at least at 60 percent of effectiveness it is worth to think about setting up a real account on a platform. One should also note that every broker receives a different fee and pays out a different premium.
Time spent on viewing brokerage platforms and testing of demo accounts cannot be considered lost. This is the best method to form an independent opinion, it is better than the finest review. It also helps to make a decision whether to invest in these particular financial instruments. Binary options are not always a beneficial choice for every investor. It is discouraged for the people ruled by emotions and for those who hastily make binding decisions. Here what counts above all is self-control and patience, that’s why not everyone can achieve an appropriate rate of return on them.