Even if you’ve never heard of SpotOption, as a binary options broker, you’ve probably already deposited money with them. Here’s why you should know the company. This article explains SpotOption’s business in detail and how it affects you as a binary options trader.

 

 

Specifically, this article will answer the following questions:

  • Who is SpotOption?
  • Why should I know SpotOption?
  • Why is SpotOption a problem?
  • What are digital options and why do they matter?

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 the software, banking and pretty much “everything else” that binary options brokers offer to their clients. There are only a few platform providers that make the systems most brokers use, and SpotOption is one of the largest of them all.

To understand the system, think about car brands. Most major car manufacturers own several car brands. They develop a platform and use it for models with each of these brands. Although these models differ on the surface – they look different and have different interiors – the actual vehicle is often identical. You get the same powertrain and same engine whether you buy an Audi or a VW, a Cadillac or a Chevrolet.

In the 1950s, the American car market was dominated by three car manufacturers – Ford, General Motors, and Chrysler. Although there are very few car manufacturers , there are many, many car brands – from Oldsmobile to Cadillac and so on. This variety is mostly an illusion selling cars built from identical components in different designs.

Many but not all binary options brokers are the result of a similar illusion. They are trademarks of several binary options manufacturers.

SpotOption does the same thing as General Motors, but with binary options. They provide the foundation;

Binary options brokers add their design and their branding. But that’s all what brokers do. As long as both brokers use the SpotOption platform, it makes little or no difference which of the two you use.

SpotOption offers these services to its clients:

  • Exchanges,
  • Content management system,
  • Customer relationship management (CRM),
  • Payment solution integration and
  • Risk management solutions.

As you can see, this list contains everything you need to get started with brokerage. Customer support, banking, website – 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 look different, but they are actually the same broker. It doesn’t matter which brokers you choose, as soon as you deposit with them the money will eventually end up with SpotOption and you will receive your binary options, assets and payouts directly. Next 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 ceased operations in early 2017. Other brokers using the SpotOption platform are:

  • TradeRush,
  • iOption,
  • TraderXP,
  • Empire, and
  • Binary VIP.

All these brokers are basically the same.

Of course, this list is not exhaustive, but you are probably dealing with a SpotOption broker when you recognize these factors:

  1. Additional trading tools. SpotOption platforms often offer features like take profit, rollover or scalping that allow you to manage your binary option after you invest.
  2. Transparent market movement, large buy and sell buttons. The SpotOption trading platform is designed to make trading easy and to help you trade as much as possible. Therefore, it shows two big investment buttons – blue button to invest in rising price and red button to invest in falling price.
  3. Trader’s Option Indicator. Most SpotOption brokers use an indicator that shows the percentage of traders who have recently invested in rising or falling prices for an asset.

SpotOption allows its clients to customize their trading platform. Every SpotOption client will be a little different and have a professional style trading platform with all the features and a lightweight platform with fewer features and a cleaner interface. However, once you feel good for the typical SpotOption look and feel, you will quickly be able to recognize SpotOption once you see it.

Why should I know SpotOption?

At first, the techniques of binary options trading may seem unimportant. Who cares how a broker creates his trading platform, as long as it’s a good one, right? Well, not that fast.

First of all, it’s important to understand what’s going on with your money. When you deposit with a broker that uses SpotOption’s banking solution, your funds will eventually end up with SpotOption and not with the broker. This is a huge difference and it means you have to investigate a completely different company when you check if you can trust the people 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. Consider the three most important:

  1. You can better understand the relationship between brokers. If two brokers are essentially the same, there is no need to compare them. Instead of being overwhelmed by hundreds of brokers out there, you understand that over 300 of them are the same thing, which makes it easy to find the right broker for you.
  2. You can better understand the risks of trading with certain brokers. Banc De Binary, SpotOption’s most important customer, had to shut down after multiple governments cracked down on business. Since all other SpotOption brokers use the same basic system, you know all about them that you need to know.
  3. You better understand the value of independent brokers. Not every broker uses a platform provider. Some do everything for themselves. These brokers are subject to government regulation and are the most reliable brokers in the market. We recommend choosing one of these brokers as they offer an honest trading environment, unlike most platform providers.

SpotOption is not the only platform provider for binary options. Companies like TechFin finances and TradoLogic offer similar services. The most popular brands of these suppliers are 24option, sponsor of soccer giant Juventus and partners with tennis legend Boris Becker. To fully understand the binary options world, we also recommend that you learn more about these providers.

 

 

Why is SpotOption a problem?

As the example of Banc De Binary has shown, there is a serious problem with the SpotOption service. These are the people you must know.

  • In 2015, SpotOption marketed its service as a perfect financial game. That’s their approach to binary options – they focus on the gaming side on the investment side. By itself, this is fine – many people pay for gambling services, so why not a financial gambling game? The problem is that most of SpotOption’s clients are unable to clearly communicate their business side. They promise quick profits and a simple trading environment, which is not is  what SpotOption offers. As a trader, you must know that. If you want to invest, stay away from SpotOption.
  • Two of SpotOptions sales managers have released internal documents showing that 80% of all traders registered with one of SpotOption’s brands lose everything they invested. That’s okay – for a gambling site. Most people who bet on sports also lose their money. But if you want to invest, stay away from SpotOption. Use only money you can afford to lose, knowing that it is very likely that you will lose it all.

In short, SpotOption is a questionable business. We advise you to stay away from it. There are other binary options brokers out there, and you’re better off with the legit one. For a list of government regulated brokers that you can trust, we recommend that you check out our list of brokers.

What are digital options and why do they matter?

As we have pointed out, SpotOption has recently faced legal issues. Their most famous brand, Banc De Binary, had to close down due to government crackdowns on the service. To face these regulatory issues, SpotOption has created a new product called  digital contracts  that is said to meet government requirements.

The digital contract is essentially a rebranded version of the old SpotOption service. They offer a few new modifications, such as a new payout and expiration model, but, so far, there is no sign that the service has become more trader-friendly.

There is simply not enough data to rate the new SpotOption service. Therefore, we advise you to exercise caution. There are reliable brokers out there, so why use a service you’re not sure if it’s legit?

SpotOption Verdict

SpotOption is a tough topic. On the one hand, it has contributed significantly to the rise of binary options, which has also led to the creation of many good brokers. On the other hand, SpotOption itself is a questionable business that prides itself on how many of their traders lose all their money.

We recommend staying away from SpotOption and its many brands. Choose a reliable, government regulated broker, and you should be fine. Our broker list is a good starting point for your search. Top brands all create their own platforms – not relying on any underlying technology.