The minimum investment (or minimum position) corresponds to the minimum amount of cash you need to invest in order to open a new binary option position with a real trading account. The minimum investment amount is an important metric when it comes to choose your regulated binary options broker. Depending on your trading and risk profiles, you may prefer to have the lowest minimum investment level in order to be able to open the highest number of positions and to risk the lowest amount of cash per trades.
Minimum deposit details of the best binary options brokers
We recommend you to always use the lowest minimum investment amount
A low minimum investment level will thus allow you to improve your risk management. You will be able to open a greater number of smaller transactions in order to diversify your risk and not bet all your deposit in one trade. Risk diversification can be implemented in two different ways:
- You can first develop an asset diversification strategy. It corresponds to a strategy based on multiple asset classes in order to benefit from the relative outperformance of one asset class compared to the other. You may then decide to open 3 different positions at the time on 3 different underlying assets: one High binary option on EURUSD, one Range binary option on an equity stock and one no touch binary option on oil. As such you cover three of the main asset classes available with binary options (forex, equities and commodities).
- You can also try to diversify your investment strategy in terms of amount invested. One simple risk management strategy for binary options consists of never investing more than 10% of your total cash deposit per transaction. That way, you will still be able to perform further trades in the event that the specific trade ends up with zero profit.
Trade-off between minimum deposit and minimum investment
Minimum deposit – it corresponds to the minimum amount of cash you need to deposit in order to open a real trading account.
Minimum investment – it corresponds to the minimum amount of cash you need to invest to open a binary options position with a real trading account.
Depending on your trading profile, you may opt for a broker that offers a high minimum deposit with a low minimum investment rather than a broker that that offers a low minimum deposit with a high minimum investment. It all depends on the amount of money you are willing to invest and the number of trades you are willing to open. For instance, with a broker that offers a minimum deposit of $100 but a minimum investment of $50, you will only be able to perform 2 trades (if they end up not making any profit). With a broker that offers a minimum deposit of $200 but a minimum investment of $10, you will be able to perform at least 20 trades.
TopOption, OptionTime and AnyOption are the best binary options brokers that offer the lowest minimum investment amount of the industry. Your choice will thus depend on another competitive advantage you want for your broker. If you want the lowest minimum deposit, you should open an account with TopOption – see review. If you want the best and most intuitive trading platform, you should open an account with OptionTime – see review. If you want the largest choice of underlying assets for binary options, you should open an account with AnyOption – see review.