Choosing a binary options broker to join a contest is a major decision. Different brokers offer various features that knowing them will help you make the best choice. In this article, we briefly explain what a binary options contest is, how it works, how it impacts your trading success, and then consider the key elements of a standard broker.
What are binary options contests?
Binary options contests are chances to earn real money. You compete against other participants on the same broker, and if you win, your prize will be transferred into your real account. These contests are open to all traders and have different lengths of time (an hour, a day, a week, a month, etc.). Orders can be placed in different time frames, ranging from as little as 30 seconds to as long as the competition’s duration. Different brokers offer different time frames, but traders usually prefer the range of 30 seconds to 10 minutes. Before entering these competitions, you should know that some contests are free to join, but you may be charged an entry fee to participate in other competitions.
How does a binary options contest work?
After entering a binary options contest, an initial virtual money is available in your balance. You should first select your desired asset, determine the amount of money you want to invest, choose the time frame you wish and then hit the Call/Put button. For instance, if you are interested in currency pairs, you can choose EUR/USD and then, based on your analysis of the market fluctuations, invest $50 of your balance in this asset and hit the Call button (if you predict that its value will be higher than the strike price) for a time frame of 10 minutes. By the end of that 10 minutes, if your price forecast comes true, you win and gain up to 95% profit, and otherwise, you lose. Of course, payout rates (i.e., the percentages of profit) varies on different platforms. At the end of each contest, prize winners will be announced based on the highest balances.
Why should you participate in binary options contests?
Apart from being extremely flexible and suitable for most tastes, binary options contest brokers do not require you to invest large sums of money for joining their contests. Additionally, some brokers even provide you with an initial capital, and therefore, you do not have to deposit any fund as the entry fee. This offer makes the broker’s contest account as its demo account, except that you have the chance to win extra money. Thus, naturally, binary options contests do not put your capital at high stakes compared to other activities such as investing in cryptocurrencies or Forex and provide the opportunity to judge your trading skills. Furthermore, suppose you have invested in other markets such as Forex, as well. In that case, binary options contests are a relatively safe means by which you can hedge your capital against a volatile or declining market.
What are the elements of a standard binary options contest broker?
Options Contest Broker Legitimacy
It would help if you had several notions in mind before registering on a broker’s platform and joining binary options contests. Of course, the first thing traders usually care about is the minimum deposit which ranges from $5 to $250. However, for most traders -who put safety first- the minimum amount is not a determining factor as long as they are assured of the broker’s legitimacy. Legitimate brokers must have a Financial Industry Regulatory Authority (FINRA) license or be granted authorization by your state’s securities regulator.
Options Contest Broker User Interface
Once you are assured of the lawfulness of your broker, you should see how convenient and user-friendly their interface is. You can try the broker’s demo account to get the feel of its platform and test its provided features. If you are new to the binary options contests, you had better steer clear of the brokers without demo accounts because a blunder in the real-time interface may result in loss. Also, it is constructive if the broker comes with a mobile app that makes your trading experience very easy.
Options Contest Broker Services
If you do not have the required time or expertise to observe and analyze the market movements, you should see whether the broker provides a signal service. A signal service gives you information about the market’s future and tells you when to invest in what asset and in which direction (Call/Put) in return for paying the subscription fee. Obviously, you should check the winning ratio of the broker’s signals and make sure how trustworthy their analyses are. Similar to this feature is copy trading. Using this feature, the trader allows a strategy manager or a financial expert to use a sum of their money in their transactions and share the resulting gain or loss. Also related to this subject is the automated binary options software that a broker may offer. The software is based on artificial intelligence. Therefore, you can input a winning trading strategy and let the software take care of the trading process.
Options Contest Broker Gifts
Attracting new users and investment is vital for a broker’s existence and advancement; therefore, they offer large bonuses and gifts to attract potential customers. However, it would help if you were cautious about the strings attached. Generally, it is not recommended to let bonus amounts be the basis of choosing a particular broker. A broker also appeals to traders by developing a referral market. You can gain access to certain features or make money by introducing the broker to other traders.
Binary options contests provide traders with a chance to increase their capital with relatively low risks. These tournaments are also suitable for those who trade part-time and do not want to spend much time monitoring the market. Binary options contest brokers allow traders to participate in these competitions to win cash prizes and improve their trading skills. Moreover, they provide some promotions and trading services. However, rewards should not cloud your judgement when choosing a broker, and you should focus more on the provided services. Also, we strongly advise that you make sure the broker is legal and offers the required features before investing your money.