Trusted UK binary options brokers provide traders with the opportunity to speculate on a range of underlying assets, via both web based trading platforms or mobile apps. Brokers operate in a range of different ways, some will develop bespoke platforms, others will use white label sites. Likewise, some are referred to as ‘over the counter’ (OTC) brokers, while others operate an exchange.
Our vetted comparison table below allows you to quickly scan the key points for any broker, and our detailed expert reviews will cover in-depth analysis of the platform, deposit options, demo account and even complaints for a specific firm. The reviews will also highlight which binary markets the broker makes available to trade.
Finally, below the broker comparison table, we explain how to compare brokers – and why some elements might be more important to you than to someone else. You should therefore, have all the information you need right here, to make the best choice for you when it comes to finding a binary broker.
Binary (or ‘digital’) options brokers provide trading platforms, via which, traders can trade either over-the-counter (OTC) or exchange traded binary options. We compare binary options brokers of both types in our table.
Identifying the best regulated binary options broker will depend entirely on the needs of the specific investor. When selecting a regulated broker, an investor needs to consider a whole range of things, including the asset class, or market, they want to invest in and the size of their average investment, to name but two.
Here at binaryoptions.co.uk we have tried to list all the useful facts that will help an individual to select which trading broker they would like to open an account with. We have also analysed our most frequently asked questions, and know that the following features are important when traders are deciding on a broker;
We try and answer as many of these questions as possible in our broker summary table, but we cover them in much more depth within each review.
For example, regulation is a key issue. Our comparison table will show if a broker is regulated, and our broker reviews will be specific about which regulator is responsible. In the UK, the Financial Conduct Authority (FCA) regulate a number of brands already – not because they trade binary options – but because they also allow clients to trade Contracts for Difference. Some binary options brokers have chosen to to register with the FCA – but this is not the same as being regulated by them. It is a key point if UK traders in particular want the piece of mind that FCA regulation gives.
Two factors that are designed to entice new account holders, are sign up bonuses and demo accounts. Both are extremely effective at attracting new customers and it is easy to see why.
Bonuses are generally paid as a deposit match, or sometimes once a set number of trades have been settled, for a set amount. Either way, there are generally restrictions, or terms and conditions that need to be met before the funds are available to be withdrawn. It is worth spending some time understanding those terms before signing up. If the terms are not likely to be met (for example a volume of trades within the first few weeks) then the bonus loses any appeal and that broker may no longer be the best choice. There are also some terms which restrict even the the withdrawal of the initial deposit – not just bonus funds. These are thankfully rare – but highlight the need for checking.
Binary options demo accounts are a great way to get introduced to binary options trading without needing to risk any funds. Investors looking longer term will ensure that the broker is the right one for them once they are trading for real money. Not simply the first to offer a demo account with a huge starting balance.
For those investors looking to get involved with binary options for the first time, minimum deposit requirements may be of interest. Some looking purely to experiment, and only risk small amounts, will find a broker with a smaller minimum deposit restriction more appropriate. Likewise, all brokers will have a minimum trade requirement too.
These can vary significantly. There will be some investors for whom neither of these are a consideration and if so, these factors do not need to form part of their selection criteria. Minimum trade figures range from £1 to £25 – which is a very sizeable difference if a trader plans to trade frequently. Our comparison tables highlight the trade sizes for every broker, so these can be compared easily.
Binary options brokers make money in two main ways – both of which are based on easy-to-understand profit models. A clearer grasp of how the brokers operate in terms of pricing can help you choose the best platform for your trading requirements – as well as the best possible deal.
So what should you be looking for in a binary options trading platform? Ease of use is a must; you ought to be able to navigate the platform, access the market data you need, make the trades you desire on the assets that interest you – and all of this should be quick, convenient and hassle-free.
But that’s not the whole story, another key question is:
Here’s a closer look at how binary options platforms operate and at where the money goes.
Especially for those people who have experience of other forms of trading, customers approaching over-the-counter (OTC) binary options brokers for the first time are likely to have a question on their mind: “Where’s the commission?”.
The simple answer is that there isn’t one. Really, although OTC companies are commonly referred to as ‘brokers’, this isn’t strictly accurate. They are not arranging a deal or acting as a middleman; they are basically the counterparty to each of their customers’ positions. So they don’t charge a separate fee or commission for the trade. Instead, each customer is essentially betting against the house.
Does this fact alone mean that OTC brokers are destined to always be in profit? Not necessarily. Let’s say that the broker offers contracts on a particular asset. Of course, there will always be the choice between a Put contract and a Call option. On the binary model, the basic theoretical assumption is always that an equal number of traders will take a contract on each position. It follows (theoretically at least), that the number of traders in the money will be equal to the losers.
OTC brokers cash in on losing positions. But taken in isolation, the fact that customers are betting against the house does not automatically mean that an OTC broker would be able to operate profitably. There must be a further element to it – and that element comes in the returns offered.
From a broker’s perspective, the return it offers its customers must be less than 100%. It might be 70%; it might be anything up to 95% (and sometimes even higher) – but unless it is lower than 100%, then quite simply, the broker does not have a viable business model in the long-term.
With this in mind, here’s an illustration of how an over-the-counter broker operates:
For a contract on a particular asset, a return of 80% is offered.
From its customers, the broker receives:
Shopping around: how brokers offer flexibility…
You will find that returns offered vary from platform to platform. The level also tends to vary from asset to asset. A well-established, and stable platform with lots of users is good news from a trader’s point of view. For one thing, it means that the broker is big enough to withstand a run of heavy losses without running into liquidity issues. On the whole, it is also more likely to be operating at or pretty close to the 50:50 binary model – where there is broad parity in terms of the number of customers taking a position on each side of a contract.
This gives a broker greater leeway to offer attractive arrangements to customers. A successful platform has more scope to offer higher returns – and thereby grow its customer base. Brokers are also able to offer more attractive terms to customers who are able to commit to higher deposits: the more you put in, the higher the return. Some also refund a percentage of losing trades – often giving customers the ability to opt between reduced payouts on winning trades in return for a higher refund on a losing position. All of this helps to give traders a welcome degree of control in managing risk.
In the UK, a broker trading binaries over an exchange generally offers additional forms of trading too. For example spread betting or CFD (Contracts for difference) trading. These forms of trading are treated differently to OTC binary platforms from a regulatory point of view. For example ETX Capital and IG Index are fully regulated by the Financial Conduct Authority – thereby giving UK customers a greater degree of reassurance in terms of fair dealing and security of deposits.
On pricing, comparing an exchange platforms with a pure OTC platform is tough (because you are not comparing like for like). One way is to look at the margin (difference between buy and sell prices). IG for instance has a margin of around 4% on binary markets – helping to make it highly competitive, price-wise.
Via one of two ways:
Whichever type of platform you choose, transparency is key – and a reputable platform will always provide clear information on payout rates so you can make informed decisions. For at-a-glance info on payout rates and more detailed information on the pros and cons of all the top platforms, search the market with Binaryoptions.co.uk.
One key element to finding the best binary trading account, is the payout percentage offered. This is not always a straightforward comparison. Payouts will vary depending on the underlying asset being traded, and the length of the option. In addition, the payouts could move as the market dictates. So where one broker was originally the best price, things may subsequently change and mean that that is no longer the case.
The best an investor can hope for is to check the payouts for the types of trades they are most likely to make, and get a feel for which firm offers the best terms most often. Again, demo accounts can help in this regard. Also, exchange traded and over the counter brokers will have different payouts – and they will not be easy to compare. In general, exchange traded options offer superior value.
Some brokers will offer managed accounts. Traders need to tread carefully in this area. There is a conflict of interest for an over the counter broker to operate a trader’s account. It is unlikely that a managed account will be operated in the best interest of the trader.
Some brokers have however, sought to gain full regulation in order to offer ‘trading advice’ in a professional capacity. This strict regulation does give consumers an added layer of protection, and may also remove the conflict if the trader directly pays for the service. The doubts remain however, that the advice would be entirely independent. It is generally not a good idea to let anyone trade on your behalf when using binaries. For this reason we would not recommend using a managed account – but some brokers do offer them, and where this is the case, it will be mentioned in the review.
Software integration might be key for some traders. Where a trader prefers to use their own price analysis software or service, a broker that can integrate with that is vital. The industry standard is MetaTrader 4 (Mt4) – a platform that allows advanced technical analysis, as well as the execution of trades.
Many brokers integrate with this service (and others) via a license. Leading brokers will also add their own features to the platform – in theory, enhancing it. So if a trader is looking for a firm that can execute trades via this platform, it is a huge benefit. Some brokers are also compatible with MetaTrader 5 – but this latest version is yet to gain traction. Though those firms that have adopted it, are to some extent, future proof. It is one further thing to consider when checking the comparison list to find the best provider.
As the above demonstrates, finding the best trading platform and binary broker is not always easy – but it is worth remembering that an investor is free to move between brokers whenever they choose, so even if an account turns out to be less useful than was first expected, it is no problem to up sticks and find a new trading firm. Likewise, a trader could have multiple accounts, and open trades at the broker with the best terms for that particular trade. A trader should not be tied down.
Within our website, we provide a wealth of information that can help in choosing the best options broker, here are a selection of articles that will help;
The best brokers for beginners will be those that offer a demo account. These accounts allow absolute beginners and those new to binary options, to try out the trading platforms risk free.
The majority of brokers will offer this facility, as it gives them a chance to demonstrate their platform.
In most cases, a demo account will not require any deposit, and a trader can open multiple accounts at various brokers. Each can be tried out, and the trader can then decide which they prefer.
Another point for beginners is that they should probably focus less on bonuses. This is because it is easy to fall into over-trading, or simply not make best use of the bonus funds. More experienced traders are better placed to ensure any bonus suits their trading style, and will not impact how they trade.
Better comparison factors for beginners might be:
Answering a question like “Which is the best trading platform?” is hard, simply because trading platforms often come down to the preference of a specific trader. One user might prefer a simple layout, another might want a lot of information available all the time.
That said, platforms do differ in quality, both in terms of ease of use, and features. In very general terms, brands which also offer Contracts for Difference (in addition to binary options) provide more feature-rich trading platforms.
So the likes of IG, CMC and ETX Capital, all deliver a very professional trading platform. MetaTrader integration is also more likely at these brokers. This difference in quality is simply a reflection of the maturity of binary options as a product, and binary brands are catching up very quickly – while still offering something different. IQ Option, for example, deliver a hugely entertaining experience, illustrating the change in style that some brokers will deliver.
The number of binary options brokers offering a low minimum deposit is growing quickly, reflecting an increasing demand for a lower entry level from traders.
Previously, minimum deposits had been quite high, but now Binary.com, Ayrex and IQ Option all offer low minimum deposits of £10 or less. This represents a real confidence from those brokers, that traders will like their trading platform and go on to make more deposits once they are familiar with the brand.
CMC Markets also offer a low minimum deposit, only requiring the deposit to match the trade size the traders wishes to place.
In our demo accounts page, we explain the benefits of using a demonstration account, and also show who provides them.
The majority of respected brands will offer a demo account – in theory, it is a great way for them to ‘show off’ their platform. So those brokers that offer this type of account, obviously have faith in their platform and the technology that supports it.
Our comparison table shows clearly whether the broker provides a demo account or not, and the in-depth review will inform readers about the specific detail of the account (if a deposit is required, or if the account is time restricted for example).