If you’ve already heard of binary options, chances are you can’t wait to get started with them. They’re still relatively new, but that hasn’t stopped countless people from turning profits with them already. While it’s good that you’re excited, before you start trading, you may be wondering if a binary options broker is actually necessary.
What Is a Binary Options Broker?
Let’s start small. Many people don’t know what a broker does. There are many types of brokers (insurance, real estate, etc.), but they all essentially do the same thing: bring two people together for a shared business interest. When you’re looking to trade a binary option, you need someone to take the other side of that contract, right? A broker goes out and finds that person for you and then takes a commission.
Can I Do This Myself?
The simple answer to this question is no. Right now, options are usually traded on the CBOE (the Chicago Board Options Exchange). In order to make transactions over this exchange, you need to be certified as a binary options broker. This means that, no, you can’t simply go on the market yourself and start buying or selling options. It just doesn’t work like that.
You May Lack Experience
Even if you could, though, there may still be plenty of reason to have a binary options broker handle your transactions for you. Depending on the kind you hire, many will actually serve as advisors. While they may not be able to recommend every possible investment that comes along throughout the day, they can assist in shortening your learning curve.
Better Trading Platforms
Trading platforms are as essential as binary option brokers. They don’t just allow you to see the market in real-time, they allow you to do so through a specific lens designed to help you see opportunities and make the most out of them.
You can pay for third-party platforms as well that operate separate from your broker. However, the platform you use will also be how you place trades, so it’s still necessary.
Help with Losses
One really cool thing about many brokers is that they’ll actually help you recoup a certain amount of your losses. Say you end up losing $1,000 because a hunch didn’t pan out. With some brokers, you could get back as much as $150. Now that may not seem like a whole lot of money, but think how that would add up over time. You could save up enough from recuperations to place a whole new trade on top of the ones you normally make.
While you definitely need a binary options broker in order to enter this world of trading, it’s a good idea to view these professionals as more than just a necessity. They have a lot to offer if you take your time in finding the right one.