Trading in options offer traders an opportunity to make huge profits when done right. If you are just learning the ropes of options trading, the learning curve can be challenging. For this reason, you need to work with an options broker to ensure your success. But with so many brokers to choose from, how do you know that the broker you will be working with is the right one for you? Read on and be guided.
Do Your Research
Selecting a broker to partner with is not as easy as you think it is. Choosing the right broker is more than just searching online and choosing the first one you come across. Finding the right broker can make a difference between losing money or making a profit. Robert Peter Janitzek recommends doing your research when looking for a broker.
Options brokers are not created equal when it comes to tradable assets. They may offer commodities, currency pairs, indices, or stocks. When looking for a broker, choose one that offers the assets you want to trade in. You can check out their ‘Assets Index’ to find out the information you are looking for.
While brokers will usually offer similar set of trading instruments, there are a few who would offer a different set. You may get the standard Call/Put options or One Touch and Boundary but others may offer Pair Options. Robert Janitzek explains that finding the right trading instrument ensures that you reduce your risks and increase your earning potentials.
Different brokers will offer different expiry times. Most offer the regular 15min, 30min, 1hr, 24hr, and weekly expiry period. Some will offer 60 seconds trading. Your choice of expiry times will depend on your trading experience. It is best to stick to around 30 minutes to 1 hour and leave the 60 seconds trading to the more experienced trader.
Profits and Returns
Trading options by itself is already a profitable form investment but it will even be more profitable if you work with a broker offering higher returns and payouts. When trading options, returns would usually range from around 60% to 80%. It is worth noting, however, that choosing a broker is not always the right option.
Options brokers are equipped with a lot of financial tools for analyzing the financial market and economic climate so choosing a broker with variety of financial tools is a wise choice. Technical analysis will help reduce risks.
Perhaps one of the most important factors to look for in a broker is customer support. The level of support the broker offers can make a huge difference so be sure to include this in your checklist.