Even if you have never heard of SpotOption, as a binary options broker, you may have deposited money with them. This is why you need to know the firm. This article explains the details of the SpotOption business and how it affects you as a binary options trader.
In detail, this article will answer the following questions:
- Who is SpotOption?
- Why Do I Need to Know SpotOption?
- Why is SpotOption a Problem?
- What Are Digital Options And Why Are They Necessary?
With this information, you will be able to understand who SpotOption is and how you should deal with the hidden empire of binary options.
Who is SpotOption?
SpotOption is a “platform provider” for binary brokers. This means that they provide software, banking, and almost everything that binary options brokers offer their clients. There are only a few platform providers that create the system that most brokers use, and SpotOption is one of the biggest of them.
To understand the system, think of a car brand. Most major automakers own multiple car brands. They develop platforms and use them for models with each of these brands. Although these models differ on the surface – they look different and have different interiors – the actual cars are often the same. 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 US car market was dominated by three automakers – Ford, General Motors, and Chrysler. Although there are several car makers , there are many car brands – from Oldsmobile to Cadillac, and so on. This variety is an illusion that sells cars building the same components in different designs.
Many but not all binary options brokers are the product of the same illusion. They are the brands of several binary options makers.
SpotOption does the same thing as General Motors, but with binary options. They offer a platform; binary options brokers add to their design and branding. But that’s all brokers do. As long as the two brokers both use the SpotOption platform, it makes little difference which one you use.
SpotOption offers these services to its customers:
- trading platform,
- Content management system,
- Customer relationship management (CRM),
- Integration of payment solutions, and
- Risk management solutions.
As you can see, this list contains everything you need to start a brokerage. Customer support, banking, the website itself – it’s all there. All you have to do yourself is name and design a few details, SpotOption doesn’t do the rest.
In 2016, SpotOption claimed to have 300 brands or affiliates. These brands all look different, but they are actually the same broker. It doesn’t matter which broker you choose, once you deposit money with him, the money will eventually end up with SpotOption, and you will get your binary options, your assets, and your payout directly from SpotOption.
The most prominent SpotOption platform is Banc De Binary, once the largest binary options broker in the world. After legal complaints on three continents, Banc De Binary stopped its operations in early 2017. Other brokers using the SpotOption platform are:
- TradeRush,
- iOption,
- TraderXP,
- Empireoption, and
- VIP binaries.
All these brokers are basically the same thing.
Of course, this list is not complete, but you may deal with the SpotOption broker when you recognize these elements:
- Additional trading tools. The SpotOption platform usually offers features such as profit taking, rolling or extending that allow you to manage your binary options after you have invested.
- Transparent market movements, buy and sell big buttons. The SpotOption trading platform is designed to make trading easy and get you trading as much as possible. Therefore, it displays two big investment buttons – a green button to invest in rising prices and a red button to invest in falling prices.
- Trader’s choice indicator. Most SpotOption brokers use an indicator that shows the percentage of traders who have recently invested in an asset price increase or decrease.
SpotOption allows customers to customize their trading platform. Every SpotOption client will look a little different, and there are pro-style trading platforms with all the features and lightweight platforms with less features and a cleaner look. However, once you get a good feel for spotting a regular SpotOption, you’ll be able to quickly recognize a SpotOption when you see one.
Why Do I Need to Know SpotOption?
At first, the technicalities of binary options trading may not matter. Who cares how a broker creates his trading platform, as long as it’s 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 the SpotOption banking solution, your money will ultimately end up with SpotOption and not with the broker. This is a big difference, and it means that you need to investigate a completely different company when you check whether you can trust the person handling your money.
This is the business side. But there are more reasons why it is important to understand SpotOption and the business idea behind it. Let’s look at the three most important things:
- You better understand the relationship between brokers. If two brokers are basically the same thing, there is no need to compare them. Instead of being overwhelmed by hundreds of brokers out there, you understand that more than 300 of them are the same thing, which makes it easier to find the right broker for you.
- You better understand the risks of trading with a particular broker. Banc De Binary, a major customer of SpotOption, had to stop its operations after many governments broke up the business. Since all other SpotOption brokers use the same basic system, you know everything you need to know about them.
- You better understand the value of independent brokers. Not every broker uses a platform provider. Some do it all for themselves. This broker can accept government regulations and is the most reliable broker in the market. We recommend choosing one of these brokers as they provide an honest trading environment, unlike most platform providers.
SpotOption is not the only platform provider for binary options. Companies such as TechFinancials and TradoLogic offer similar services. The provider’s most popular brand is 24option, which sponsors soccer champions Juventus and partners with tennis legend Boris Becker. For a complete understanding of the world of binary options, we recommend learning more about this provider as well.
Why is SpotOption a Problem?
As the Banc De Binary example shows, there are serious problems with the SpotOption service. Here are the people you need to know.
- In 2015, SpotOption marketed its services as the perfect financial game. That’s their approach to binary options – they focus on the gaming aspect over the investment aspect. In itself, this is fine – many people pay money for gambling services, so why not financial gambling games? The problem is that most SpotOption clients cannot communicate clearly about their business aspects. They promise fast profits and easy trading environment, which is not what SpotOption provides. As a trader, you need to know that. If you want to invest, stay away from SpotOption.
- Two of the SpotOptions sales managers released an internal document showing that 80 percent of all traders who signed up with one of the SpotOption brands lost everything they invested. That’s fine – for gambling sites. Most people who bet on sports lose their money too. But if you want to invest, stay away from SpotOption. Only use money you can afford to lose, and know that you will most likely lose it all.
In short, SpotOption is a questionable business. We recommend staying away from it. There are other binary options brokers out there, and you are better off signing with one that is legitimate. For a list of reliable government-regulated brokers, we suggest looking at our list of brokers.
What Are Digital Options And Why Are They Necessary?
As we have said, SpotOption has recently faced legal issues. Their most popular brand, Banc De Binary, was forced to shut down due to many governments ruining the service. To face this legal issue, SpotOption has created a new product called digital contract that should meet the government’s requirements.
The digital contract is basically a rebranded version of the old SpotOption service. They offer some new modifications, for example new payments and expiration models, but, so far, there is no indication that the service has become more merchant friendly.
There is insufficient data to rate the new SpotOption service. Therefore, we recommend caution. There are reliable brokers out there, so why use a service where you’re not sure if it’s legit?
SpotOption Verdict
SpotOption is a difficult topic. On the one hand, it has contributed significantly to the rise of binary options, which also led to the creation of many good brokers. On the other hand, SpotOption itself is a questionable business that implies how many of their traders lose all their money.
We recommend staying away from SpotOption and its many brands. Choose a broker that is regulated by the government, and you should be fine. Our list of brokers is a good starting point for your search. The leading brands all created their own platforms – not dependent on any underlying technology.