Even if you never heard of SpotOption, as a binary options broker, you have probably already deposited money with them. This is why you should know the firm. This article explains the details of SpotOption’s business and how it influences you as a binary options trade.
In detail, this article will answer these questions:
With this information, you will be able to understand who SpotOption is and how you should deal with the hidden empire of binary options.
SpotOption is a “platform provider” for binary brokers. This means they provide the software, the banking, and almost everything else that binary options brokers offer to their customers. There are only a few platform providers that create the systems that most brokers use, and SpotOption is one of the biggest of them.
To understand the system, think of car brands. Most big car makers own several car brands. They develop a platform and use it for models with each of these brands. While these models are different on the surface – they look different and have different interiors – the actual car is often identical. You get the same drivetrain and the same engine whether you buy an Audi or a VW, a Cadillac or a Chevrolet.
In the 1950s, the U.S. car market was dominated by three car makers – Ford, General Motors, and Chrysler. Despite the few car makers, there were many, many car brands – from Oldsmobile to Cadillac, and so on. This variety was mostly an illusion that sold cars build of identical components in different designs.
Many but not all binary options brokers are the result of a similar illusion. They are the brands of a few binary options makers.
SpotOption does the same thing as General Motors, but with binary options. They offer the platform; binary options brokers add their designs and their branding. But that is all that the brokers do. As long as two brokers both use the SpotOption platform, it makes little to no differences which of the two you use.
SpotOption offers these services to its customers:
As you can see, this list contains everything that you need to start a brokerage. Customer support, banking, the website itself – it’s all there. All you have to do yourself is come up with a name and design a few details, SpotOption does the rest.
In 2016, SpotOption claimed to have 300 brands or affiliates. These brands all looked different, but they were effectively the same broker. It is unimportant which of these brokers you choose, as soon as you deposit money with them, the money will eventually end up with SpotOption, and you will get your binary options, your assets, and your payouts directly from SpotOption.
The most prominent SpotOption platform was Banc De Binary, once the biggest binary options broker in the world. After legal complaints on three continents, Banc De Binary ceased its operations in early 2017. Other brokers that use the SpotOption platform are:
All of these brokers are essentially the same thing.
Of course, this list is incomplete, but you are probably dealing with a SpotOption broker when you recognize these elements:
SpotOption allows its customers to customise their trading platforms. Every SpotOption customer will look a little different, and there is a pro-style trading platform with all the features and a light platform with fewer features and a cleaner look. Nonetheless, once you get a good feeling for the typical SpotOption look, you will quickly be able to recognise a SpotOption once you see it.
At first, the technicalities of binary options trading can seem unimportant. Who cares how a broker creates its trading platform, as long as it is a good platform, right? Well, not so fast.
First of all, it is important to understand what is happening to your money. When you deposit with a broker that uses SpotOption’s banking solution, your money will eventually end up with SpotOption and not with the broker. This is a huge difference, and it means that you have to investigate an entirely different company when you check whether you can trust the people who handle your money.
This is the business side. But there are much more reasons for why it is important to understand SpotOption and the business idea behind it. Let’s look at the three most significant ones:
SpotOption is not the only platform provider for binary options. Companies such as TechFinancials and TradoLogic offer similar services. The most popular brand of these providers is 24option, which sponsors soccer giant Juventus and partners with tennis legend Boris Becker. For a complete understanding of the binary options world, we recommend learning more about these providers, too.
As the example of Banc De Binary indicated, there are severe problems with the SpotOption service. Here are those you have to know.
In short, SpotOption is a questionable business. We recommend staying away from it. There are other binary options brokers out there, and you are much better signing with one of the legitimate ones. For a list of government regulated brokers you can trust, we recommend taking a look at our broker list.
As we already pointed out, SpotOption has recently faced legal issues. Their most popular brand, Banc De Binary, had to close due to many governments cracking down on the service. To face these legal issues, SpotOption has created a new product called digital contract that is supposed to fulfil government requirements.
Digital contracts are basically a rebranded version of the old SpotOption service. They offer a few new modifications, for example a new payout and expiry model, but, so far, there is no indication that the service has become more trader friendly.
There is simply not enough data to judge the new SpotOption service yet. Therefore, we recommend being cautious. There are trustworthy brokers out there, so why use a service where you are unsure whether it is legitimate?
SpotOption is a difficult topic. On the one hand, it has contributed significantly to the rise of binary options, which has also lead to the creation of many good brokers. On the other hand, SpotOption in itself is a questionable business that boasts about how many of their traders lose all their money.
We recommend staying away from SpotOption and its many brands. Pick a trustworthy, government-regulated broker, and you should be fine. Our broker list is a good starting point for your search. The leading brands all create their own platforms – not relying on any underlying technology.