Best Binary Options Brokers

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Contributor, Benzinga
September 26, 2023

Ever since binary options got official recognition in 2008, they have been a popular choice for retail investors. But you need good binary options brokers to ensure the best success with this type of investment.

While good brokers are a necessity in any trading, they are especially important for a derivative asset like binary options. Read on to learn more about the best binary options brokers.

7 Best Binary Options Brokers

Broker availability in this industry will vary based on your location. U.S residents have a good choice of regulated domestic brokers but also limited options when trading offshore.

1. Best Overall: Pocket Option

Pocket Option is one of the simplest investment platforms anywhere. When you register for Pocket Option, the process includes:

  • Registering and funding your account
  • A 50% deposit bonus (available at publication)
  • Choose your asset
  • Decide how much you want to spend
  • Decide if the asset will go up or down
  • You earn if your prediction is correct

There are both desktop and mobile applications that help you access and manage your account.

When you use Pocket Option, you also gain access to a 24/7 live support email and online message line. You can call for service, chat in the community forum and avail yourself of over 100 available assets. Think of Pocket Option as the simplest way to access the market or simply an easy way to invest when you have very little time to spend navigating a complex website or app.

Pros

  • Deposit bonuses available
  • Easy to budget
  • Easy to set up your option bet

Cons

  • Is only regulated internationally

2. Best for Binary Options: Raceoption

Raceoption is a binary options trading broker that offers access to over 100 stocks, commodities, currencies, cryptocurrencies, other digital assets, precious metals and index funds. Casual investors can use this platform to play out short-term trading strategies, which are aided immensely by the trading signals the platform provides. Remember, though, the platform is not available for U.S. traders.

You get an alert any time the perfect trading situation presents itself, and you can easily go into the platform, make the investment, exit a position or learn more about the signal you just received. You can keep all your CFDs and binary options in one place and even use the copy trading feature to learn from the best.

Pros

  • Access to hundreds of assets
  • Good for short-term trading
  • CFD trading is available

Cons

  • Not available to U.S. traders

3. Best for Active and Global Traders: Interactive Brokers

Interactive Brokers is a powerful and wide-ranging trading platform that offers a comprehensive range of trading tools for any investor. The platform makes it possible for you to invest in futures, stocks, forex and options. 

While the platform is designed to serve advanced or experienced traders, there’s quite a lot of information to be had along with:

  • 24/7 trading
  • Access to over 135 global markets
  • Fixed fees for those who don’t trade all that often
  • Tiered fees for active traders
  • Free trades with IBKR Lite

Pros

  • 24/7 trading
  • Access to over 100 markets
  • Simple fee structure

Cons

  • Not designed for novices or beginners

4. Best for Demo Accounts: eToro

  • eToro Stocks
    Best For:
    Demo Accounts
    securely through eToro Stocks's website

    eToros securities trading offered by eToro Securities, Inc, (“the BD”), member of FINRA and SIPC. Investing involves risk.

eToro is a broker with access to some of the world’s most popular cryptocurrencies, stocks and options, just to name a few. You can set up your eToro account in around 10 minutes and begin using the platform to:

  • Practice trading with a virtual account
  • Use CopyTrader to follow along with your favorite investors
  • Learn more about the investments you’re making
  • Centralize your investments with one platform

With low fees and a host of information on the assets you’re managing, there’s plenty to do and learn through eToro. Plus, you can take advantage of promotions and deals that the platform often provides to its members.

Pros

  • Copy trading
  • Virtual trading is also available
  • Easy to learn more about investing

Cons

  • Relatively high fees for non-trading activities

5. Best for Long-Term Binary Options Traders: Dukascopy Bank

A bank that offers binary trading is a rarity but Dukascopy does that. A Swiss financial institution since 2004, it is regulated by the Financial Market Supervisory Authority (FINMA).

Dukascopy offers a wide selection of financial products: currencies, cryptocurrencies, commodities, indices, stocks, bonds and binary options.

Binary options are available for 18 forex pairs. Trading is available through the proprietary JForex platform. It works as a web-based platform, desktop platform or mobile app (for both Android and iOs).

Payouts for binary options vary from 70% up to 90%. Trading sizing starts as low as $1 and there are no commissions. Besides traditional up/down binary options, Dukascopy also offers touch binaries — options on FX currency pairs with 2 remote strike prices set around the open price.  Here you are betting which level will be reached first until the settlement time (end of the day). If the price reaches neither, the contract is canceled and your trade is refunded.

Yet, a downside for short-term traders is that Dukascopy doesn’t use a traditional binary options price entry model — (bid-ask) / 2 — so this platform is the best for long-term binary options traders.

Pros

  • Options on over a dozen forex pairs
  • Binary option payouts from 70% to 90%
  • Quality mobile app

Cons

  • Regulated internationally
  • Non-traditional price model

6. Best for Asian Markets: Spectre.ai

Spectre.ai is the first platform to transform binary options into digital contracts. Powered by the Ethereum smart contracts, the company has been operating since 2017.

A major advantage that Spectre holds over any other binary options broker is that you don’t need to make deposits. Using smart contracts you are able to trade directly from your digital wallet.

The liquidity pool is crowdsourced and traders trade either against each other or against the liquidity pool, depending on the volume. 

Trading is available 24/7 on a vast number of forex pairs, commodities and cryptocurrencies. In addition to advanced risk management options, Spectre has Trader’s Bay where you can buy platform upgrades — from higher payouts, larger investment size to a lucrative 400% payout for scoring 3 wins in a row.

For those who want to trade directly from the platform, minimum deposits start at $10 and the minimum trade size is set at $1. For trading directly from a wallet, there are no deposits and the minimum trade size is $50.

You can trade either from the proprietary web platform or a mobile app. 

Important note: Spectre.ai focuses on the Asian market and is not available for U.S. residents.

Pros

  • Crowdsourced liquidity pool
  • 24/7 trading
  • Low minimums

Cons

  • Only focuses on non-U.S. markets

7. Best for Novice Options Traders: Closeoption

You may want to start with an options trading demo account, try binary options or choose a broker to handle all your options trades. No matter what you need, you can start with Closeoption. You can get into stock options, commodities, currency pairs, indices and more. Yes, you will want to start making higher deposits if you want to get those high returns that are promised, but you can learn, start small, use a demo account if needed and invest with confidence at Closeoption.

Pros

  • When you have the option to use a demo account, it helps you practice or simply test theories before spending your money
  • The platform helps you expand your options portfolio without opening a bunch of new accounts

Cons

  • Because the platform cannot multiply your winnings for you, you will need to try their contests or deposit more money, which can feel risky to some traders

What is a Binary Option?

A binary option is one of the simplest financial instruments. Technically, it is a derivative — when you buy it you are not buying (or selling) an underlying asset but speculating on its movement.

There are 3 variables that define a binary option:

  • Asset: What are you speculating on? This can be anything from a currency, commodity, individual stock or even one of the stock indices.
  • Duration: How long is the expiry time? Depending on the options available it can be anything from one minute to one week or longer.
  • Direction: What direction are you betting on? Is the asset going to rise or fall?

While the value of traditional options fluctuates based on the distance to the strike price, this is not the case with binary options. Here the outcome is binary, either a win or a loss — hence the name.

Binary options have variable payouts. They are based on volatility, liquidity and other factors. Although they are sometimes as low as 50%, they are usually between 80% and 100%. Breakeven results on binary options usually need a 56% win rate with excellent results around 65% or higher.

Benefits of Binary Options

When it comes to trading binary options, some benefits put them in front of other derivative products.

First of all, binary options are rather simple. With 3 variables (asset choice, duration, direction) they are easy to understand, even for complete beginners.

Furthermore, they have limited total risk — you can only lose the amount invested. This is helpful compared to other trading (like forex), where under certain conditions your stop-loss might get bypassed resulting in unacceptable losses.

Although some brokers now offer early closure of positions, originally this wasn’t the case. Yet this is an advantage, as not being able to get out of the position early results in better trading. It also helps prevent overtrading, which is a bad habit.

Finally, you can start trading binary options with a small amount of capital. Combined with their simplicity this is what makes them so attractive to beginner traders.

A Great Way to Learn

Binary options are one of the simplest financial instruments out there. Although once considered risky, this was because of a large number of scams. Yet, as the industry matured this is less of a problem. If you stick with reputable brokers your risk is not larger than in any other financial market.

Binary options offer a great way to dip your toes into the financial markets — learn how and why they behave the way they do and even make some money. The fact that the maximum risk is known and limited will always be the most important thing for beginners.

Frequently Asked Questions

Q

Are binary options legal?

A

While almost all offshore brokers are not allowed to serve customers in the U.S., the brokers listed above are either heavily regulated or decentralized. So, trading binary options on those platforms is safe and legal.

Q

What is the best binary options broker?

A

The best binary options broker is one that fits your personal preferences. This could be anything from the style of the platform and instruments offered for trading to geographical availability and regulation. You should always try out a platform demo before committing yourself to trade real money.

Q

What is a binary option?

A

A binary option is the speculation of an assets future movement.

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About Stjepan Kalinic

Forex, Equity Analysis, and Financial Education