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Binary Options Trading in the UK
Everything you need to trade binary options successfully.
Research. Find a broker. Trade.
For UK investors, trading with binary options is a tax free form of investment with very quick results – minutes rather than months or years. The word binary is used because there are just two possible outcomes – either the trade is successful, and the investor gains a significant return (usually between 75% to 95%) – or the trade is unsuccessful, and the full investment amount is lost.
During 2020 however, European regulators have prohibited the sale or promotion of binary and digital options to retail investors in the EEA. This includes the UK. Only professional clients or professional accounts are now permitted to trade binaries with regulated firms. A professional trader must meet 2 of these 3 criteria:
- Open at least 10 trades of ‘significant size’ per quarter (brokers define ‘significant’ differently)
- Own a portfolio or trading capital of €500k or more
- Have worked for 2 years in the financial industry, or have experience with complex trading instruments.
Unregulated firms may not adhere to the new ESMA rules, and will continue to accept UK traders. This does increase risk for the trader, and makes finding a trustworthy broker even more important. It is however, possible to find brokers regulated outside of the EU that will accept EU traders, and are still regulated by respected bodies.
So ‘binaries’ (or ‘digital options’) are a high risk form of investment, but that risk is offset by the potential for very high rewards with minimal waiting time. Most brokers are regulated, offering consumers the sort of protection they would expect while using financial instruments of this type. Returns from binary trading are also currently viewed as tax free by HMRC.
Top Brokers in the UK 2020
|Min Deposit||Min/Max Trade||Payout||Bonus||Demo||Regulated||App|
|£5||£5 – £100,000||91%||Review||» Visit|
|£10||£1 – £10,000||91%*||Review||» Visit|
|£5||£5 – £10000||93%||75% Pro Account + 10% CB||Review||» Visit|
|£250||From 0.1 lots – £100,000||–||Review||» Visit|
|£10||From 0.1 Lots – Varies by asset||N/A||Review||» Visit|
|£250||£1 – £10000||90%||100% Deposit Match||Review||» Visit|
|£50||£5 – £1000||85%||30%||Review||» Visit|
What Are Binary Options?
Binary option meaning – Binary options are a derivative, traded on any asset or market. For example a stock price (Twitter, AstraZeneca etc), indices (FTSE, DAX, Nikkei), commodity value (gold, crude oil) or foreign exchange rate (EUR/USD, GBP/USD). Even cryptocurrencies such as Bitcoin or Ethereum can be traded.
The main difference between more traditional stockbroker trades, and binaries, is the clear identification of risk and reward before the trade is made. An investor knows exactly how much is at risk, and crucially, also knows the exact value of any potential returns. No calculator, formula, or maths degree is needed to work out profit and loss on a binary option.
This structure of the trades is what has led to the terminology of “all or nothing” , or “cash or nothing” being widely used.
The only decision for a trader is if the value of the underlying asset will rise or fall. The degree of the price change is not important. The trader is purely speculating on whether the price will be higher or lower than the current price, at a specific time in the future.
Short term price movement can be triggered by news stories or headlines, quarterly statistics, buyout rumours or even global security fears.
Trading binary options offers a Yes/No proposition. Although there are variations on the High/Low option, this type of investment will always have a black and white, Yes/No, binary outcome. Where trades can be closed, redeemed or sold mid-trade, payouts have absolute figures of 0 and 100 and prices move between as the market dictates – until closure.
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Every binary option is offered with an expiry time. This is the point at which the trade will end. So the price at expiry is the one that will decide whether an option has won or lost (“in the money”, or “out of the money” in binary jargon). These expiry times can vary from just 30 seconds or 1 minute, (known as ‘turbos’), to a full day (‘end of day’), to even longer in some circumstances – rolling up to a full year.
Generally however, a binary option is used for short term trading – usually under 30 minutes (5 minutes are the most popular). Longer term expiries – and the element of fixed risk – does make them useful tools for hedging or diversifying other holdings.
Payouts change dependant on the asset and the expiry time. Differences can be significant so traders looking to use binary options long term, need to shop around to find the best payout for the asset class (or classes) they intend to trade.
Video Tutorial – Binary Trading Explained
Watch this video tutorial of the IQ Options platform, which shows how to place a binary trade:
Although binary trading is in a period of growth, it remains a relatively unknown product. Over time, this is likely to change. As digital options (as they are also known) offer a very simple fiscal arrangement. They are a legitimate way to play the financial markets.
Binaries offer a clear trading choice, but they are also high risk / high reward. There is however, no leveraged exposure with a binary trade, so the risk and reward ratio is also simple to manage.
Are Binary Options Safe?
Binary options suffer from a poor reputation. This is basically a result of dishonest and irresponsible marketing and cyber crime, more than an issue with the product itself. With tighter regulation, and a better understanding by the wider public, these options can – and will – move into the financial mainstream. Which was where they originally developed.
While FCA regulated agents and businesses may still have their flaws and faults, they are not fraudsters. The angry emails we receive focus entirely on unregulated brokers promising “easy money”, or a route to “get rich quick”. Read our section on avoiding scam brokers below.
Advantages Of Binary Trading
Many of the advantages of using binaries are related or linked. Here we list some of the benefits to using this form of investment – not just for the retail investor, but also to the market makers or brokers:
Managing risk when trading binary options is clear cut. The amount of the trade is the full amount that is at risk. This clarifies the risk not only for the trader, but for the broker too. Their pricing model reflects the accurate knowledge of their liability.
Trading Fees And Spreads
The certainty of risk provides a solid foundation for brokers to work within and manage. This leads to low trading feed, tighter spreads and higher payouts. To protect themselves further, they may use a liquidity provider or hedge their own positions. The expensive broker costs of clearing houses becomes unnecessary.
Leverage, or gearing, is not generally available with binary trading. This benefits the broker again, as it means all trades must be funded in full. In other words, no trader can default on a trade. With leverage, if things go wrong, there is a real risk of the broker not being paid. This is a big difference vs spot forex or spread betting.
Layers of complexity can be added to the standard fixed payout option. From a ladder option, to boundary trades or more advanced ‘nesting’ of options to create ‘strangles’ etc – binaries can be used in a huge variety of ways.
A binary trade offers the greatest level of flexibility. They even provide a mechanism to speculate on a market remaining flat, arbitrage, or to take a view on the trade volume of the underlying asset.
Robots and Auto Trading
Auto trading robots (‘bots’) often rely on signals and algorithms triggered by price graphs. Again, these robots attract many of the undesirable operators, and the automatic nature of the trades increasing risk further. New traders should be especially careful. A large amount of ‘due diligence’ is required when trying to find the right robot service.
An alternative approach is for traders to build their own robots using their own entry points. A growing number of brokers now offer traders the ability to put their own trading robot or program together, using simple tools. These hacks allow combinations of technical analysis settings, such as moving averages, Bollinger bands or RSI / MFI patterns, that then open trades when those criteria are met. It has made binary options ‘pro’ robots available to everyone.
|Robot Name||Info||Choose from 20 pre-built robots and compare past performance. Activate automated trades in 3 steps.||» Visit||Regulated broker. Self build robot tool offering huge range of features.||» Visit||Free to join. Flexible settings including indicators, expiry and methods.||» Visit||Free Demo Account. Choice of money management and algorithms.||» Visit|
Binary trading itself is legitimate, and not a scam. There are however, brokers and signal providers that are untrustworthy and operate scams or frauds.
It is important not to write off the concept of binary trading, purely based on dishonest brokers. These fraudsters continue to drag down the image of this form of trading. Regulators, and rule makers are slowly starting to get to grips with these operations and the industry is being cleaned up. If you want to complain about an operator to our watchdog, please let us know via our Contact Us page.
Avoid scams with these simple checks
- “Make money online” or “Get rich quick” marketing. This is a huge red flag. Binary options are a high risk / high reward investment vehicle – they are not a get rich quick scheme and should not be sold as such. A “no loss” system does not exist. Operators making such claims are being dishonest. A binary options millionaire is almost certainly fake. The Brit Method is one high profile example – swerve it.
- Cold Calls. Reputable brokers will rarely make cold calls – they do not need to. Cold calls are from untrustworthy brokers. This could include email contact.
- Bonus Terms and Conditions. If taking a bonus, read the terms and conditions. Some terms include tying in any initial deposit or capital until turnover requirements are met. The deposit is still the trader’s money – honest brokers will not lay claim to it before any trading has been done. The better brokers will also offer the option of cancelling a bonus if it does not suit the trader. CySec, the leading regulator, has recently banned the use of deposit match bonuses as they believe it leads to clients ‘over-trading’.
- Account Managers. Be very wary of any account manager, tipster or ‘guru’ wishing to trade on behalf of clients. There is an obvious conflict of interest – they have jobs with the broker. These managed accounts generally encourage traders to trade with figures way beyond their means. This “upselling” is very harmful. The intensely risky Martingale system is a frequent tactic, and results in many quickly blown balances.
- Celebrity Endorsement. Sporting legends or team sponsorship is usually fine – and verifiable. Where this backing should worry rookie investors, is where the name of a mega rich billionaire or credible source is ‘pushed’ as a selling point. Warren Buffet, Richard Branson and Martin Lewis have all been presented as backing certain propositions when they actually have zero involvement – other than to sue the perpetrators for damages via a lawsuit.
- A trader must know their broker. Seems obvious – but some operators ‘funnel’ clients to a brokers of their choosing, not yours. If the merchant demands new clients sign up with a particular broker, or they pick the broker from a limited list – do not proceed. A trader should know the broker they are going to trade with!
Being aware of the above methods should help those new to binary trading to avoid the less responsible brands. Improved regulation and more awareness should hopefully reduce these types of complaints. This in turn can allow binaries to move forward.
Already fallen victim? The services of MyChargeBack.com might be of help.
The recent ban of binaries in the EU is ill-thought out, and could well end up pushing more traders towards scams.
Our strategy pages covers over 20 known systems, drawn from a range of forum and club chats, plus expert tips and advice. From high risk Martingale, to intricate systems like the Rainbow. We also cover more specialist subjects, like forex , technical analysis, the best price action indicators, trading signals and winning strategy. All this is aimed to help you gain an edge, and win.
Signals are an alert, sent to traders. They are designed as a trading tool, helping traders to spot opportunities. They can be communicated via a range of methods – email, SMS or from a live signal website or group. Much of the irresponsible marketing associated with binary scams is linked to signals – or auto trading robots utilising them. There are some very good providers out there too. However, in general, learning how to trade binaries is a safer route than using signals to compensate for a lack of trading knowledge.
Do signals work?
Sometimes, but rarely in isolation. Some providers deliver a combination of education alongside signals and that represents a good mix. Traders must be able to fully assess a signal before they can judge the quality of them. We also highlight some of the best providers on the signals page.
Brokers And Reviews
A binary option can be used in a number of ways, and across a huge array of commodities and markets. This means finding the best dealer, best account, or best trading platform, really depends on the needs of the individual investor.
For example, some brokers may focus on forex (foreign exchange) and trading the Japanese Yen, Euro or sterling. Others may be strong on commodities and only offer a handful of FX markets. Likewise, the returns (or payouts) may differ between asset classes, and with these varying by as much as 25%, it is easy to see the importance of making the right selection.
White label platform providers such as SpotOption, Tradologic or TechFinancials also dictate what products the host site can offer, so a proprietary broker with a bespoke design might be preferable. Payment methods merit some thought – if traders want to use Skrill, Paypal, Neteller or Wire transfer, they need to check the broker delivers that.
Mobile trading apps delivered by brokers or binary agents can vary in quality too. Some specifically program for the features of specific models, like iPad or iPhone. Others ensure cross platform compatibility, catering for android, blackberry and windows tablets and devices. Some traders may have tailored demands for any hand held app, others less so.
Trade size limits may point some investors either to, or away from, certain trading accounts. Some brokers offer minimum trades of just £1, while others cater for investors willing to invest £200,000 in a single trade. So every investor needs to consider their own trading style before deciding to open an account. Even working out the ‘cheapest’ broker is not as easy as it sounds.
How To Compare The Best Trading Platforms
Our comparison table delivers a quick summary of the key points when comparing brokers. Our detailed reviews then allow potential new users to assess some of the finer points that might confirm their decision. Here is a list of some of the vital comparison points for brokers;
- Over the counter or exchange traded options
- Minimum deposit (Plus deposit and withdrawal methods)
- Minimum trade / Maximum trade
- Trading platform
- News events feeds
- Asset lists (Extended lists might include ETFs, bonds and trusts)
- Charts / Charting tools (Graph types, forecasting tools)
- Expiry times available
- Regulation (FCA, CySec, CFTC etc)
- Range of options available (Boundary, Ladder, High Yield etc)
- Welcome Bonuses
- Complaints / Customer feedback
- Account Types and Benefits (VIP, Basic, Platinum)
- Plugins and Integration. (E.g. MT4 / MetaTrader4 / MetaTrader 5)
- Promo perks, Competitions, Leaderboards or Contest Prizes
Some points might be more important to certain traders than others. So finding the “best” will be an individual choice for each new client. A speculator taking a position on the monetary policy of the Bank of England or ECB might be best served by one broker, while the person looking to bet on growth in the Apple, Facebook or Vodafone share price might want another.
Most top brokers offer demo trading accounts. These allow new clients to try the services on offer. They can see if the range of markets and investment scales suit them and only proceed to a funded account when they are happy that the right trading account has been found.
Those brokers that do provide practise or virtual balances, have confidence in their trading platform. They are prepared to let new traders see it, and try it out, risk free. The review for each broker will include whether it offers a demo in the “Key Details” section.
UK Regulated Binary Options Brokers
Trading binary options in the UK has become increasingly popular over the last five years or so. While the risks of this type of trade are high, so are the rewards. But many countries consider these types of financial transaction as dubious, and the regulations governing them can differ from country to country. While you should ask the advice of an options trading UK broker, it’s also a good idea to know a little about the regulations yourself.
The List of UK Regulated Binary Options Brokers
There has been a sudden surge in the number of brokers and brokerage firms operating within the UK in recent years. While there is currently no legal requirement to be registered with a regulatory body, membership of the FCA demonstrates a level of competence, trustworthiness and professionalism. We’ve found several FCA regulated binary options brokers, so you can easily choose the one that suits you best among the reputable brokerages.
IQ Option – the official partner of Aston Martin Racing
IQ Option is the licensed broker, who set the new standards in the whole trading industry. Their WebGL-based beautiful and fast trading platform has a huge potential, and they develop more and more trading instruments, including classic and digital options. IQ Option is a partner of Aston Martin Racing team and they’ve won in 24 Hours of Le Mans in 2020.
Fortrade – UK based brokerage
ForTrade provides it’s clients with clean website and trading platforms for both PC and Mobile devises. The broker is regulated by FCA and all online transactions are carried out in compliance with Payment Card Industry Data Security Standard (PCI DSS). The broker is based in London, Chelsea, London, 81 Fulham Rd. The minimum deposit for new clients is 100 pound only.
24 Option – CySEC regulated Binary and CFD broker
For binary options trading 24 Option is the one of the first platform among all. It deserves the good reputation lot’s of traders prefer this brokerage. After opening account, clients can choose to trade short term options, high/low options, one touch options, or boundary options and even forex CFD.
CTOption is the FCA authorised broker, who provides the outstanding Replicator feature. The clients allowed to copy the trades of experts and other more experienced traders.
CTOptions provides it’s clients with Panda Trading Platform, where you can trade High/Low, One Touch, Hyper and Range options.
Who is Responsible for Regulating Binary Options Trades in the UK
Most trades in, from or to the UK fall under the auspices of the Financial Conduct Authority (FCA). However, when trades cross borders, external bodies can get involved, such as the Cyprus Securities and Exchange Commission (CySEC) and
the USA Commodity Futures Trading Commission (CFTC) . The FCA regulates the industry, and will investigate complaints of improper conduct as and when they’re made. This national regulator is also the main body with which most UK regulated binary options brokers are registered.
What Are the Different Types of Binary Options Broker in the UK?
There are two main categories of binary options broker in the UK: those registered in the UK and those registered with offshore organisations. While there’s nothing wrong with using an options broker from outside the United Kingdom, you may not have the protection afforded by affiliation to the Financial Conduct Authority.
Before you hire the services of a broker, it’s a good idea to research their background and history of delivering results. You can ascertain an individual’s or company’s credentials by checking their listing on
the Financial Conduct Authority website .
As well as checking for membership of the FCA, you can assess a broker’s suitability by looking at
customer reviews . You can also read the Terms and Conditions and FAQ sections of their website, which should give you an idea of how they operate. It’s also a good idea to check what types of financial instruments are being offered. If offers and bonuses are being offered, you might stand to maximise your returns.
If possible, check how much the broker, on average, pays out to clients. Someone with a proven track record of delivering high returns might be in a position to maximise the efficacy of your own trades. Brokers often offer different types of trading accounts, based on issues such as risk aversion, the amount being invested and long-term goals.
The UK is home to one of the most successful
binary options trading markets in the world. Find the right broker, and you can maximise your chances of financial success.
Top 10 UK Binary Options Brokers by TradersAsset
Welcome to the TradersAsset list of UK approved Binary Options brokers. These brokers are recommended to all traders from the UK and have been tried and tested to prove that they can provide an excellent online trading experience.
As you may or may not be aware, the Financial Conduct Authority (FCA) is tasked with overseeing and regulating all financial service companies based in the UK. As the UK is part of Europe, you are free to sign up and trade at any Binary Options broker that is licensed in any other European country.
You can of course sign up and utilize the services of any Binary Options broker or trading site licensed outside the UK or Europe. However, we would advise you to use the sites listed here at TradersAsset, as each of these has a solid track record for giving their customers a safe and secure trading environment.
Top 10 UK Binary Options Brokers
Recommended Binary Options Brokers for UK Traders
The following Binary Options brokers have a range of different banking options that allow UK based traders to have access to low cost deposit and withdrawals. You will find each site listed at TradersAsset offers their own unique incentives to both new and existing traders. Each broker has 24 hour customer support, accessible via instant chat, email or toll free phone lines.
Best Binary Options Brokers 2020: