The difference between binary brokers is whether you can exit early. While Nadex Binary Options (which is actually an exchange and not a broker) allow traders to exit early if conditions change, a lot of binary brokers do not allow traders to do that. What does that mean?
Difference Between Binary Brokers
Below is a snapshot of three trades I entered. One was on the US 500, one on the US Tech 100 and one on the Wall St 30. As you can see, all three are in profits. However, the charts showed that buyers were stepping in on the low. This changed the conditions dramatically because it indicated price would go up (ie the retracement was completed).
Since my account is with Nadex Binary Options, I can exit early (conditions warrant an early exit) and lock in profits even though my profit target at $15 was not reached. This means I can bank what profits I have and not suffer a loss. However, if my account were with a binary options broker that is “All or None” then I would not be able to exit early. That means if price were not lower than the strike price I would lose because an early exit is not possible.
If the binary options broker does not allow an early exit, then they have the advantage (in my opinion, of course). Because although the current price may move in your direction, without the close in your favor, then you lose.
This is one of the reasons that I only recommend the Nadex Binary Option exchange. With Nadex I don’t have to stay in the trade until expiration. This is very important to me because I don’t like staying in during expiration as the premiums get quite crazy. Instead, I go in, make my money, and get out.