Welcome to trade pros. We know binary options.
Selecting the right broker for your trading strategy can have a huge impact on your bottom line, so it is not a choice to be taken lightly. We advise you to do your homework and select one or more suitable brokers for you, your preferences and your trading strategy or strategies.
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What are Binary Options
Binary options are financial instruments that only have two possible outcomes. Either they mature in the money and you gain a good return or they mature outside the money and you lose your entire investment. This is why they are called binary options, the outcome is binary, you win or you lose. Other names include all-or-nothing options and digital options.
Binary options are always based on an underlying financial instrument. The movements of the underlying instrument will decide whether or not the binary option will mature in the money or not. Your goal as an investor is to be able to predict which options that will mature in the money and invest in those while avoiding investing in options that mature outside the money.
You can read more about binary options and how they work here.
Choosing a broker
It is not possible to crown one particular binary options broker as The Best Binary Options Broker, since there are so many individual variables to take into account. The same is true for trading platforms – a platform that is great for Peter and his trading strategy might be totally wrong for Paul and his way of trading.
In this article, we will go through several aspects that are good to remember when comparing binary options brokers. Exactly how much weight to put on each aspect depends on your personal circumstances and preferences.
A great way to learn more about brokers and platforms is to sign-up for free Demo Accounts filled with play-money and use them to explore and make play-money trades. For most of us, this gives a much truer feel for the brokers and the platforms than simply reading through instruction manuals or similar.
If you can´t find a broker that ticks all your boxes, signing up with more than one broker can be better to take advantage of their various strengths while avoiding the weaknesses. Below, we will look at why many savvy traders use more than one broker.
Different brokers for different underlying assets
If you speculate on more than one underlying asset or asset type, it can be beneficial for your bottom line to pick the optimal broker for each trading strategy instead of compromising.
You might for instance find that one broker is better for forex speculation, while another shines when it comes to stock speculation. Sometimes, we even find major differences within a category. Broker A might have a super-tight spread on USD/GBP, while Broker B is the best choice for speculation on a minor forex pair such as CHF/JPY.
Different brokers for different binary option types
Pretty much every binary option broker offers the classic High/Low binary option, but if your strategy involves other option types you will have fewer brokers to chose from and you might need to open accounts with more than one broker; not just to find these alternatives (Boundary binary options, Ladder binary options, etc) but to find find these alternatives offered with good terms and conditions for the trader.
Risk management – don´t put all the eggs in the same basket
There is always risk involved when you take your own hard-earned cash and hand it over to someone else. A company can have their assets (including client assets) frozen during a legal investigation, a company can become insolvent, an organisation can be run or operated by dishonest individuals, and so on. This is not unique to brokers; even a gift card issued by a make-up store can become worthless if the make-up store files for bankruptcy.
Therefore, some traders prefer to not put all their eggs in one basket. Instead of only using one broker, they deposit and keep money in accounts with several different independent brokers – sometimes even taking care to pick brokers in different countries in case some local issue erupts.
Having accounts with more than one broker also makes you less vulnerable to technical problems. If one specific broker or platform is not accessible when you really need to get exposure to Apple shares or the Swiss franc right away, you can use one of your other options, and you can do it quickly since you already have an account set up.
Access to your money
If you suddenly find yourself in a situation where you want (or need) to remove a lot of money from your trading account, it can be difficult if you are using a broker who enforces an upper withdrawal limit per transaction, per day and/or per week. Also, making a much larger withdrawal request than normally can raise concerns and your account might be flagged for suspicious activity. In essence, the broker halts the transaction to protect your from what looks like a potential fraud, identify theft or similar, because you are doing something different from your normal pattern. It is nice that these safeguards are in place – but it is horrible when you really need to move money quickly and it takes time to resolve the issue with the broker.
This is another reason why some traders prefer to keep their money in accounts with several different brokers. Making several mid-size withdrawals from multiple brokers is easier and will not make you hit any upper limits or trip any wires.
Don´t pick a broker for the welcome bonus
Many brokers offer a welcome bonus to entice people to sign up, but picking a broker based on their welcome bonus offer is not something that we recommend. In the long run, other factors will have a much bigger impact on your profitability with a broker. Also, some welcome packages comes with some serious strings attached, e.g. trading requirements that will be very difficult to fulfil without making additional deposits and putting a lot of your own money on the line.
I nice welcome package with good terms and conditions can be the icing on the cake, but do not let it determine which broker your go with. Remember to always read the fine print before accepting any bonus. This is true for both welcome bonuses and other bonuses/offers.
Trading requirements
Naturally, a broker does not want you to make a deposit, get a big bonus and then promptly withdraw all the money. Therefore, bonus money typically comes with a trading requirement. Alternatively, you can never take out the bonus money – only the profits generated by them.
Trading requirements are very common and how difficult they are to fulfil will vary. Always make sure you know beforehand: Will the trading requirement apply to only the bonus amount, or to the deposited amount + the bonus amount?
Example: You deposit $200 and get a 50% welcome bonus. The trading requirement is 25x.
- If the trading requirement applies only to the bonus money, it is 25 x $100 = $2,500.
- If the trading requirement applies to the deposit as well, it is 25 x $300 = $7,500.
Knowing how the trading requirement is calculated is important before you accept any bonus.
Deposit bonus
A deposit bonus is a bonus you get for depositing. It is common for brokers to offer a deposit bonus on your first deposit, but some brokers also give deposit bonuses to their existing traders.
The size of a deposit bonus is usually impacted by the size of the deposit.
Example: Deposit today and get a 50% deposit bonus, up to a maximum of $400 in bonus money.
No-deposit bonus
Some brokers will give you a bonus simply for signing up, before you have made any first deposit. There are also brokers who give out no-deposit bonus money to their existing traders, e.g. to reward VIP Account holders.
A no-deposit bonus is typically fairly small, e.g. a $10 sign-up bonus.
Fulfilling the trading requirements can prove to be difficult without making at least one deposit.
“Risk-free” trades
Some brokers will give you so called risk free trades instead of (or in addition to) a deposit welcome bonus.
The standard version of the risk free trade works like this: If you lose money on your risk free trade, that money will be replaced by bonus money. The bonus money comes with a trading requirement (or similar strings attached), so it is not the same as having normal money in your account.
So, the risk free trade is not really risk free, since your risk losing real money and having it replaced by bonus money. Always make sure you know the terms and conditions before you accept a “risk free” trade, including the size of the trading requirement if there is one.
What will happen to my account while a try to fulfil the trading requirement?
Before you accept any offer that comes with a trading requirement, it is a good idea to check what it actually entails.
- Will your account be completely blocked from making any withdrawals until the trading requirement is fulfilled? Or will only the bonus amount be blocked?
- What happens if you submit a withdrawal request without first fulfilling the trading requirement? Will it be automatically denied? Will it be approved, but you will lose all the bonus money + any profits generated by the bonus?
- Is there a time limit for how long you can continue to work on the trading requirement? What happens if you do not reach the goal in time?
Before you accept any bonus money, ask yourself how easy or difficult it will be for you to fulfil the terms and conditions while sticking to your normal trading style (trade size, frequency, etc).
If you have already accepted a bonus and is struggling to fulfil the trading requirement, contact the broker´s customer support. It is often possible to have the bonus money removed from the account, which is better than feeling stuck and having a trading requirement hanging over your head. It is better to have the bonus money removed than keeping it and letting it encourage you to make more deposits and more trades than you really want.
What can I speculate on using this broker?
This is of course a very important factor to take into account. If your special skill is stock prize predictions, don´t sign up with a broker who only offers binary options based on forex and cryptocurrency, and vice versa. You need a broker that offers the category of underlying assets that your trading strategy hinges on, and who also has a good assortment of suitable assets available within that category.
Examples of common asset categories:
- Forex (foreign currency pairs)
- Cryptocurrency
- Stocks
- Stock indices
- Commodities
- Exchange traded funds (ETF)
How much that is available within each category will vary a lot depending on which broker you go with, so check this in advance. There are for instance brokers who boost about offering speculation on commodities, but when you actually check the commodity category it consists of a very meagre offering of gold, silver and one type of crude oil. If gold/silver/oil speculation is your thing, no problem, but if your trading strategy is based on something else – like palladium, platinum, natural gas or agricultural commodities – you need to find another broker. Don´t let the broker force you into adapting your trading strategy. If you have an edge in a certain field, go for it – and find a broker that is optimal for that.
Minimum deposit and minimum trade size – are the limits suitable for your bankroll and trading strategy?
Before you pick a broker, make sure the minimum deposit and minimum trade size is suitable for your trading plans. Many novice traders want to start out with a small first deposit and use trading and risk-management strategies that rest on the ability to make small trades. Therefore, before you go through the trouble of scrutinizing a broker further, it is a good idea to check if this broker permits small enough deposits and trades. If not, you can simply scratch it off your list for now. Do not let a high deposit requirement or a high minimum trade sizes convince you to scrap your trading strategy and start depositing and risking more money than you are comfortable with. It is better to start out with a broker that caters to the needs of small-scale hobby traders and gradually build your bankroll. Today, there are many such brokers available online, so you don´t have to sign-up with a broker that is unsuitable for your bankroll at this moment.
It is not difficult to find good binary options brokers where the minimum deposit is $50 or lower. Quite a few are available in the $10-$20 range, and some brokers even permit smaller deposits than that. Along the same lines, they also normally permit small trades, since it would not make much sense for someone to make a $5 deposit if the minimum trade size is $10.
A few other points to consider
- How small is the smallest permitted withdrawal? If it is high, you may end up in a situation where your money is “locked in” because there is not enough money in your account to reach the withdrawal limit. Note: Many, but not all, brokers will waiver the minimum withdrawal size requirement without much wriggling if you want to close down your account and withdraw whatever is left in the account.
- Sometimes, the min and max limits will vary depending on which transaction method you are using.
About the binary options
Binary option types
Which types of binary options do you want to use, and is this broker offering them?
For many traders, the classic High/Low binary options is sufficient. Others want to include other binary options types in their strategy, such as Ladder binary options, Boundary binary options, or Pairs binary options.
While you are checking if your preferred binary option type or types are available, also check the terms and conditions for them, as this vary between the various brokers.
As with many other aspects, this is a point where it can be profitable to have accounts with several brokers instead of just sticking to one broker. You may do best with Broker A for your classic High/Low binary options trading, but when you are branching out and start trading Boundary binary options as well you realize that Binary B actually have a much better offer for those particular options.
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Binary options stake size
It is important to pick a broker where the minimum stake size for the options that you are interested in is low enough to suit your bankroll and trading strategy. Many novice traders start out with a small bankroll and need to make small trades. It is not advisable to risk a big chunk of your total bankroll on an individual trade. For proper risk-management, trades need to be small enough as you gradually grow your bankroll.
Binary options lifespans
Most binary options traders are daytraders and do not have any positions open at the end of the trading day. If you want to keep positions open longer, you need to pay special attention to this aspect when selecting a broker, because some will not offer it – or will offer it but only for a meagre assortment of options and/or with poor terms and conditions. There are brokers that are suitable for binary options traders that are into more long-term speculation, so it is worth putting some effort into seeking them out instead of accepting poor conditions with a broker who is just half-heartedly offering this type of option.
At the other end of the spectrum, we find the super-fast binary options popularly known as turbo options. You can for instance buy options that will expire within 5 seconds, 10 seconds, 30 seconds or 1 minute.
Binary options that have a longer lifespan than turbos but will close before the end of the trading day are still very popular. On many trading platforms, you can adjust their lifespan in increments, e.g. 1 hour, 2 hours, 3 hours, etcetera.
Early close-out and prolonged lifespans
Some brokers offer special features that allow you to tinker with the lifespan of an active binary option.
There is for instance the early close-out option, which allows you to close the position right now instead of waiting for the option to expire as planned. Closing-out an option that is in-the-money right now can be a way of securing a profit, although you will typically be offered a lower payout or required to pay a fee for using the service.
Another service is the ability to prolong the lifespan of an active binary option by paying a fee. If you have strong reasons to believe that your option will expire in-the-money if it just gets some more time, it can be a useful service.
Binary options payouts
When it comes to the payouts, it is difficult to compare brokers. Many of them will proudly display the highest possible payout, but that does not necessarily say much about what you can expect from the type of option, underlying asset and timespan you are interested in. The highest paying option might pay 95% with this broker, but the options you are interested in pays in the 60%-65% range. Payout levels tend to be impacted by numerous factors, making it difficult to compare brokers.
Generally speaking, exchange-model brokers will have higher payouts than OTC-model brokers. You can read more about these two models further down on this page.
One way to develop a bit of a feel for the payout levels for your own trading strategy with a particular broker is to use a free Demo Account and do play-money trades. Of course, this is time consuming and it is not feasible for a trader to evaluate 20+ different brokers in this manner. However, if you have a short-list of just a few brokers that all score high on other points that are important to you, using a free Demo Account is a great way to find out more about them.
Tip! Get a higher payout by being contrarian
Do you have a neck for knowing when the general market sentiment is wrong? Do you often find yourself making a profit when investing against the market? If so, it might be beneficial for you to pick one of the brokers where you get a higher payout percentage when you trade against the market instead of following the prevailing trend.
Trading platforms
Proprietary or third-party?
We can divide the trading platforms into two broad categories:
- Independent third-party trading platforms
- Proprietary trading platforms tied to a specific brokers
The independent third-party trading platforms are utilized by a wide range of brokers and their clients. MetaTrader 4 (MT4), MetaTrader 5 (MT5) and cTrader are all examples of big and well-known third-party trading platforms that a lot of traders are familiar with. If you want to use one or more of these platforms, you will have a wide range of brokers to chose among. For some traders, this is a big plus, because once they have learned how a big third-party platform works it is very easy for them to switch to another broker (or get an additional broker) if the need arises, without having to adapt to another trading platform. This can be especially important for traders who rely on technical analysis and utilize complex built-in platform tools for this.
A proprietary trading platform is instead made specifically for one broker. It was developed for that broker only and is only access by traders who have an account with that broker. This category is larger and also more varied. Some platforms are for instance only designed to facilitate binary options trading and do not offer anything else, while others are more comprehensive.
Some brokers will give you access to both their own proprietary platform and one or more of the independent third-party ones.
Download or browser-based?
Do you want to download and install the platform or use one that can be opened and used directly in the browser window? When software needs to be installed, it is important that it works with the operative system of your computer. Software developed for Windows might not work on Apple computers, and so on.
Mobile devices
If you want to trade on a mobile touch-screen device, such as a smartphone or tablet, you will typically get a better experience if you download a trading app from the broker instead of using the browser window version of the platform on your device.
Today, many brokers offer apps for both iOS and Android devices.
Make sure you actually get access to the instruments, assets and feature that you want, because some apps are a scaled-down and limited version of the full trading platform.
Interface
This is a question about personal preferences. Which type of interface and layout do you prefer? Some like sleek, minimalist platforms, while others want there to be a lot of data and tools visible at all times.
Some platforms allow for a certain degree of customization when it comes to this, to better cater to the needs of different traders.
Technical analysis
If you are interested in using technical analysis, it can be convenient to pick a platform that comes with suitable tools and features for this so you don´t need to use a separate application. This is a point where the different platforms do vary a lot. Some of the proprietary platforms have a lot to offer in this regard, while others do not support technical analysis or offer only a meagre set of tools and features. The well-known third-party platforms MT4, MT5 and cTrader all come with serious tools and features for technical analysis, and the MT5 is considered one step better than the MT4 in this regard.
Miscellaneous
- With this broker and platform, will you have access to a signal service? For free or for a cost? Is the quality good? Is it easy to use?
- Is automated trading supported?
- Is copy trading supported?
- Is social trading supported?
Exchange binary options brokers vs. OTC binary options brokers
The exchange-model broker will work like a classical broker, i.e. a middleman between traders. An over-the-counter (OTC)-model binary options broker is not really a broker, since the company will be your counterpart in each trade.
For an exchange-model broker, it does not matter if you win or lose a trade, because the company makes money from spreads and/or commission on each trade. For an OTC broker, it does matter, because they are your counterpart so your profit is their loss.
An exchange-model broker will match you with another trader. If no match is found, the deal can not go through. With an OTC-model broker, the broker will only offer deals where they are willing to be the counterpart.
When it comes to binary options, brokers that operate as actual middlemen for retail traders are not very common. Most “brokers” that you will see are trading sites that use the OTC broker model for the binary options. One notable exception is Nadex, which is an actual broker/middleman for binary options.
Payouts
Exchange-model brokers tend to give higher payouts. They take less risks (since they are not the counterpart in the deal) and they are making money from spreads and/or commissions.
OTC-model brokers tend to offer lower payouts on binary options.
Of course, in the end, other fees and costs must be taken into account as well. Payout levels is not the only factor that will impact your bottom line.
Spread
Spread is the difference between buy price and sell price. The tighter the spread, the less costly it is to trade for the trader. As a trader, you want to find a broker that offers tight spreads for the assets you wish to speculate on.
Commission
Commission is a fee charged to facilitate a deal. It is common for brokers to charge a commission. When a broker offers commission free trading, it can be because they are an OTC broker or because they are making enough money from the spreads. As always, you need to take the whole picture into account to see if the offering is actually good for you or not.
Leverage
Using leverage means that you borrow money from your broker to carry out a deal. How much leverage you will be offered vary between different brokers, but also depending on the nature of the deal, e.g. option type, underlying asset and timespan.
Many countries are today limiting how much leverage a broker can extend to a non-professional trader, especially for extra volatile underlying assets such as cryptocurrencies. Some law makers are also requiring that the broker gives the non-professional trader negative account balance protection, to prevent non-professional traders from ending up in debt when they lose on a deal.
Using leverage adds another level of risk to a deal. Instead of simply going for the broker who offers the biggest leverage (some offer up to 1:1000 or even more) we recommend that you do your home work, learn about how leverage works and then make an informed decision about how – and if – you want to incorporate leverage in your trading strategy. You also need to know how negative account balance protection work, because it is a bit of a two-edged sword. It sounds like a nice protective cushion, but it can put you in a pickle if you don´t understand how it works.
Deposits and withdrawals
It is important to pick a broker that accepts at least one transaction method that you are okay with using and that doesn´t cost to much to use to deposits and withdrawals. There are brokers who do not charge anything for processing deposits and withdrawals, but the method you are using (e.g. a credit card like VISA or an e-wallet such as Skrill) will typically cost something.
When brokers do charge a fee for processing deposits and/or withdrawals, the fee can depend on the method used, so make sure you check for the particular method you intend on using. Also remember that some brokers will permit a limited number of withdrawals per month without charging a processing fee.
Can I use Bitcoin for deposits and withdrawals?
In recent years, a growing number of binary options brokers have begun accepting certain cryptocurrencies for deposits and withdrawals. The two most commonly accepted ones are Bitcoin and Ether (Ethereum), but some brokers accept more than just these two.
The minimum deposit
Many traders prefer to make a small first deposit when trying out a new broker, so make sure the broker doesn´t require a first deposit that is bigger than you are comfortable with.
Min and max for withdrawals
- How small is the smallest permitted withdrawal? You you don´t want to get stuck in a situation where you can´t make a withdrawal from your account unless you have a lot of money in it.
- How large is the largest withdrawal amount? If you want to make a big withdrawal from your account, would you be forced to split it up into several mid-sized withdrawals instead? Are there any limits for how much you can withdraw in day, seven day period, month, etcetera?
- Some brokers (but not alll!) will not enforce the minimum withdrawal limit when you are closing down an account. This means you will be able to withdraw any remaining money even if it is below the normal threshold.
Examples of common transaction methods
- Advcash
- Alipay
- Apple Pay
- Astro Pay
- Bitcoin Transfer
- Cashu
- Cheque
- Ethereum Transfer
- FasaPay
- Flutterwave
- GlobePay
- Google Wallet
- JCB Card
- M-Pesa
- Maestro card
- MasterCard credit/debit card
- Neteller
- PayPal
- PayRedeem
- Paysafecard
- PayTrust88
- Perfect Money
- POLi
- QIWI
- Skrill
- Sofort
- UnionPay
- Vietcom Bank
- VISA credit/debit card
- WebMoney
- Western Union
- Wire transfer
Account currency
Some binary options brokers allow you to select your account currency from a list of permitted account currencies. With other brokers, only one account currency is possible, and it is usually USD.
Customer support
- Is customer support available in a language that you can use?
- When is the support open? Is it open during your typical trading hours, in case you need help right away and can´t wait until office hours next Monday?
- How do you prefer to reach out to the customer support, and is this method available with this broker? The most common methods are phone call, live chat and email.
- If only email support is available, you will not be able to get help in real time. If you have an issue that someone needs to guide you through, step-by-step, it can take a long time using email.
- If live chat is only available through the platform, it will not be available to you if you are experiencing problems logging into the platform. Some brokers therefore also make the live chat available on their official web site.
- If you prefer phone support, is there a local or toll free number available to call? Or would you need to make a potentially costly phone call to another country? Some brokers make is possible to call over the internet, e.g. using Skype or Whatsapp. There are also those who offer a call-back service. You contact them using live chat or email, and ask them to call you. That way, you will not be the one paying for the phone call.
KYC checks
In order to comply with anti-money laundering protocols, many brokers carry out know-your-customer checks. This will typically involve proving your identity and where you live. You may for instance be asked to upload and photo copy of your photo ID (passport, driver´s license, national identification card or similar) and a photo copy of a utility bill in your name that shows you address.
It is common to not be permitted to withdraw money form an account until the KYC check has been completed, so it is a good idea to get it out of the way as soon as possible.
Regulation
Where is the broker based and regulated? Which legal framework will apply? If something goes wrong and the broker breaks the law, are you confident this jurisdiction will give you, the trader, proper protection?
In recent years, many of the stricter countries have clamped down on binary options, particularly leveraged binary options trading offered to non-professional traders. Because of that, many brokers have elected to move to jurisdictions that are less strict in this regard, in order to keep offering binary options to non-professional traders and doing it with big leverage.
There are still some binary option brokers left in the stricter countries, but not that many. When you find the broker that suits you best, you might also find out that it is based in and regulated by a small island nation on the other side of the planet. It is up to you do decide if you feel comfortable with this or not.
Are binary options illegal in Malta now?
No, Malta (a reasonably strict legislator) has not banned binary options for non-professional traders, but the country has limited how much leverage that can be offered. Malta is a member of the European Union and must therefore adhere to EU rules regarding non-professional trader protection.
As a non-professional trader, you can still use a binary options broker based in Malta, but your access to leverage will be limited based on the underlying asset type.
Which countries are “strict”?
Here are a few examples of countries that are considered strict or semi-strict when it comes to leverage and the sale and distribution of binary options to non-professional traders:
- Malta, which is a part of the European Union. The Malta Financial Services Authority (MFSA).
- Cyprus, which is a part of the European Union. The Cyprus Securities and Exchange Commission (CySec).
- United Kingdom. The UK Financial Conduct Authority (UK FCA).
- Australia. Australia Securities and Investment Commission (ASIC).
- South Africa. The Financial Sector Conduct Authority (FSCA) has replaced the Financial Services Board (FSB) of South Africa.
- United States of America. The Commodity Futures Trading Commission (CFTC).
Free Demo Accounts
Many brokers offer you to sign up for a free Demo Account. This is a great way to explore and find out if you like the broker and the platform (or platforms).
Typically, a free Demo Account will come with play-money. This is better than a Demo Account that only allows you to navigate the platform, since placing orders with play-money will give you a much better feel for how everything works and if you genuinely like the interface. It is not fun to realize to late that even though the platform looks nice, it is actually rather clunky when it comes to putting in orders. In high-paced binary options trading, being able to get it right without being encumbered by a clunky platform is essential.
Here are a few things to keep in mind regarding the free Demo Account:
Is a deposit required to get access to the Demo Account?
Most brokers will happily give you a free Demo Account without requiring you to make any deposit. After all, one of the main reasons to sign up for a Demo Account is to check out the broker and platform before you decide if you want to commit and make a deposit.
Brokers that have faith in their offering will typically not be stingy on this point. They want you to get a Demo Account, really see and experience how great their product is, and then make the informed decision to become a real-money trader with them.
Be extra cautious if a broker requires you to make a deposit before you are allowed to explore. Look out for other red flags – this broker might be a bit sketchy or at the very least annoying to deal with. There are so many good brokers available today that you do not have to settle for someone who is acting weird.
Is it complicated to sign up?
Many brokers will happily give you a Demo Account without requiring you to go through a long and complex sign-up process, verify your identity or similar. With some, an email address is actually all you need. After all, we are talking about a Demo Account with play-money.
It is reasonable to be a bit suspicious if a broker require you to jump through a bunch of hoops just to get a Demo Account, or seems overly eager to extract as much personal information about you as possible.
Are some aspects of the platform excluded?
It is a not a good sign if a lot of the platform remains hidden when using a Demo Account, e.g. certain types of options or underlying assets, the technical analysis tools, etc. The same is true if there are several platforms available but you only get to explore one of them.
With that said, some brokers do hide certain information service features from demo account users since they are reserved for real-money traders. They might for instance have a valuable trading tip service included in the platform, and they do not want people to open a free demo account just to get free access to it. This is not considered a red flag.
Can I get more play-money?
It is common for the Demo Account to come with a fixed amount of play-money, e.g. $10,000. Some brokers will give you free refills and others will not. It is not a big deal if you just want to check out the platform, but it can be an issue for traders who want to continue using their play-money account to test run and fine tune trading strategies.
Is there a time limit?
Some brokers put a time limit on the Demo Account. Avoid brokers that act as if they want to stress you into making a decision and prevent you from exploring at your pace. A reasonable time limit (e.g. 30 days) is fine, but why limit a demo account to 30 minutes?
A firm time limit can also be an issue for traders who want to continue using their play-money account to test run and fine tune trading strategies. Contact the broker´s customer support if this is a key factor for you, because sometimes they can and will life the time limit.
This article was last updated on: September 12, 2023