SmartEarn

As a counter-party, ensuring an ‘over round’ via payout percentages. Known as ‘Over the counter’ (OTC)
Via a spread or commission on an exchange traded model

People who have experience of other forms of trading, and are now approaching over-the-counter (OTC) brokers for the first time may find themselves asking the question: “Where is the commission?”.

With OTC binaries however, there is no commission. In theory, the term ‘brokers’, is not correct. Binary firms are not arranging a deal or acting as a middleman, or as a market maker; What they are, is the counter-party to each of their customers’ positions. So there is no fee or commission for the trade. Instead, each customer is essentially betting against the house. Where brokers have both sides of a trade covered, they have a handsome margin. Where they do not, the payout still gives them a level of protection. In certain circumstances, the broker will also hedge it’s own position to mitigate risk.

Those companies (Nadex, for instance) that trade binary options via an exchange operate much more like a ‘broker’. Unlike the OTC market where the platform is the counter party, with exchange traded options, the broker is the middleman – matching buyers with sellers and charging a commission. This charge is normally hidden within the spread, rather than an explicit cost. There is far less risk involved for the broker, and therefore generally better returns per trade for the trader. Brokers can be actively compared using the spread – the tighter the spread (difference between buy and sell prices) the cheaper it is to trade.

Brokers using the spread model often also offer leverage, or trading on ‘margin’ via their software. This increases the trade size for the trader – and profit for the platform.

Should You Use Multiple Brokers?

There are some very good arguments for having more than one binary trading account:

Brokers suit certain trades. Different brokers will suit different trading styles, or trade types. So one broker might be excellent for shorter term trade types, and have great payouts on forex pairs. But that same brand may be slightly less good when it comes to offering boundary trades or indices payouts. If a rival had a full set of long term expiries with great payouts, and lots of choice of boundary trades – it makes sense to have accounts with both platforms, and place trades with the broker that offered the best deal for each trade.
Demo accounts. Multiple demo accounts makes perfect sense – you want to try as many brokers and trading platforms as possible before deciding where to trade.
Reduce risk. Accounts at more than one broker protects you from any issues with a particular firm. From issues as serious as insolvency, to smaller things, like website downtime, software issues or a market being closed – multiple accounts reduces your risk of being affected by any hardship a broker might face.
Multiple offers. Each sign up can mean a new bonus, so it might be worthwhile taking up more than one account to receive all the offers. As ever, read the terms – and also note that on occasion, larger deposits might mean larger bonuses – so splitting them may not be the best choice.
Spread winnings. Some brokers may look for winning traders on their books, with a view to restricting their trading, perhaps limiting trade size – or worse. While this threat is thankfully small, multiple accounts means spreading the winnings out. Most brokers will search for “winners” based on total profit rather than strike rate, so hiding the volume across broker accounts can help you stay below their radar.

Exchange versus OTC (Over the Counter) Brokers

Exchange Brokers

A broker that offers an exchange is much closer to a traditional ‘broker’ than OTC brokers. An exchange performs the job of ‘middleman’. They will match a seller of an asset, with a buyer of the same asset, and charge a commission for putting the deal together. The market itself will decide the prices – if there are more sellers than buyers, the price will drift down until demand rises. If there are more buyers than those willing to sell, the option price will rise.

A broker operating an exchange does not mind who wins and who loses. They take no risk on the trade themselves (unless the traders are trading on credit). The broker will make their commission on the trade regardless of the outcome.

Due to this reduced risk for the broker, the returns for a winning trader are generally larger. Commissions are usually small relative to the size of the trade, meaning they do not impact the payout too much. Other benefits include the fact that stop losses can be applied, and also that trades can be closed at any time (to take a profit or reduce losses).

The complications with exchanges, comes from the structure. An exchange traded binary option will “trade” somewhere between 0 and 100. Where 0 is the figure used where an event did not occur, and 100 where it did. If the current price is currently 30, a ‘buyer’ would risk 30 times his trade size, to potentially win 70. A ‘seller’ therefore, would risk 70 to win 30. While not a complicated equation, it is slightly more complex than the straight forward over the counter option.

OTC (Over The Counter) Brokers

The most common type is the Over the counter (OTC) broker, but this type of firm is not really a ‘broker’ at all strictly speaking. They are the counter-party to one side of the trade. So where a trader opens a position, the broker will win or lose money, based on whether the trade wins or loses. Only where the broker has another trader who has made the exact opposite trade, will they have assured profits.

Due to this increased risk, the brokers will offer a lower payout which mitigates some of the risk they are taking. It is therefore likely to be lower than an exchange traded broker. Some firms will also have built in ‘hedging’ mechanisms to reduce risk further. In some cases, one side of trade might be made unavailable if liabilities get too large.

The simplicity of binary options is retained with OTC brokers. They have also made great strides in competing with exchanges by offering ‘cash out’ values for options, allowing traders to close positions early, and set up stop losses. Once those features become common the gap between OTC and exchanges will get smaller. For now, traders are better off trading on an exchange – but might be advised to learn the differences via demo account.

Have you had a problem with your broker? Submit a complaint

Payment Methods

Deposit and withdrawal options do vary at each brokerage. Each of our reviews will explain which each firm offer, but below is a list of the most common options.

If you are looking for brokers that support a specific payment method:

Neteller
Paypal
Skrill
Webmoney
Paysafecard
Ukash
Visa
Amex
Bitcoin
Wire Transfer
Credit cards / Debit cards

All of the factors covered above will ultimately affect the way a trader plays the market, and therefore, their profitability. The ideal situation is to get a binary broker that offers:

Several financial assets spread across several markets
Offers a reasonable bonus with a good payout approaching 90%
Offers flexible expiration dates without boxing traders into very long expirations.

Trading using a broker’s platform will only be enjoyable, and profitable, if you are using a reputable operator. You also need to choose one that suits your trading style best – only you will know what that is. Read the above binary broker reviews carefully before making that crucial trading decision, but remember you are not tied in to any single broker, and can pick and choose.

General risk warning: your capital is at risk

Binary options 2022

Quotex is an innovative broker offering binary and digital asset trading. The company offers a wide array of trading assets, easy one-click trading, and multiple methods of banking. Read our expert review and see if Quotex match your trading style.

Quotex.io Review

Quotex is owned and operated by Awesomo LTD. Address: Suite 1, Second Floor, Sound & Vision House, Francis Rachel Str., Victoria, Mahe, Seychelles ID: 221042.

Awesomo Limited is a member of the IFMRRC (number TSRF RU 0395 AA V0161). The IFMRRC is an independent third party dispute resolution service and not an official regulator.

The websites services not available to persons under 18 years of age.

Payment method restrictions may affect traders in the US, Canada, Hong Kong and Germany but they can still deposit using cryptocurrency.

Key Features

Minimum Deposit: $5
Max Payout: Up to 98%
Demo: Yes
Regulated: Member of IFMRRC
Bonus: Yes

The Platform

Quotex is a platform for trading digital options on a wide variety of underlying assets (over 400). The term digital option refers to trades based on simple up and down price movement with predetermined costs and fixed outcomes.

There is no download required, the platform is completely web-based.

The platform supports trading of options on securities (companies), forex, commodities, and some indices like the S&P 500.

The expiry durations are fairly diverse as well with 1 minute, 2 minutes, 5 minutes, one hour, and on up to a month or more in some cases.

Payouts

The payout percentage varies based on the asset, and time frame.

Returns will also vary on existing trade information, for example if a large proportion of traders are all speculating in the same direction, the payout is likely to reduce for new positions – conversely, those taking the contrarian view are likely to see a larger than expected payout %.

Education

The best method to learn the system is to utilise the demo account (more on that below). In addition however, Quotex does provide guidance videos and market news.

Trading signals are also offered, but these only become available on the full account – they cannot be accessed on the demo version.

Mobile App

In addition to the desktop platform, Quotex also deliver an android based trading app.

The app is quick, responsive and user friendly. It offers all the functionality of the web version, and finding markets and placing trades follows the same process.

The app has been reasonably well received by users, with an overall rating of 3.6*

One shortcoming with the mobile offering at present, is the lack of an iOS version for iPhone / iPad users.

Charts

The charts are quick in terms of response to market fluctuations and highly customizable.

The platform hosts dozens of commonly used indicators that can each be fine-tuned to a trader’s personal taste.

Ordering screens are embedded to the right of the chart so making trades is super easy.

Also included are trading signals and market news but you have to have a live account to access them.

The Demo Account

Quotex offers a demo account with $10,000 in tradable funds. The demo account allows full access to trading features but limits access to the news, trading tips, and other proprietary information.

Deposit, Withdrawal, And Bonuses

The minimum deposit at Quotex is only $5 and can be done made in dollars, euros, pounds, and even Bitcoin.

Deposits can be made by credit card, eWallet, wire transfer or cryptocurrency and are usually available within minutes of depositing.

eWallet options include AdvCash and Perfect Money.

Withdrawals are made back to the same source unless a secondary source is verified. There are no fees for withdrawing or depositing but some methods may incur fees not associated with the platform.

Quotex does not offer a bonus on the website but they are available once you begin the deposit process.

Go to trading

Check out Neteller new app features Track your winnings, withdraw instantly.

Check out our new app features Track your winnings, withdraw instantly. Deposits made easy Our app makes adding funds to your account easier than ever. Send money anywhere Seamless money transfers to friends and family around the world. View your transactions Easily track your spending, all in one place. Deposit now

SmartEarn

Tuesday, January 9, 2024

බෙට්ටින්ග් sri lanka

Wednesday, August 23, 2023

Best forex broker 2023 sri lanka

Best forex signal

Sunday, May 28, 2023

AliExpress free shipping

Thursday, March 17, 2022

2022 Top Bianry option broker

How do Binary Options Brokers Make Money?

Brokers

IQ Option

Olymmp trade

Expertoption

Pocketoption

Quotex