Even if you have never heard of SpotOption as a binary options broker, you have probably already deposited your money. This is why you need to know the company. This article goes into the specifics of SpotOption business and how it impacts you as a binary options trader.
This article elaborates on the following questions:
- Who is SpotOption?
- Why should I know SpotOption?
- Why is SpotOption a problem?
- What are digital options and why are they important?
This information will help you understand who SpotOption is and how to deal with hidden binary options.
Who is SpotOption?
SpotOption is a “platform provider” for binary brokers. In other words, it offers software, banking and almost everything that binary options brokers offer their clients. Few platform providers create systems that most brokers use, and SpotOption is one of the largest.
To understand the system, think of your car brand. Most large car manufacturers own several car brands. They develop a platform and use it for their respective brand’s models. These models have different surfaces, but different exteriors, and different interiors, but the actual cars are often the same. Whether you buy an Audi or VW, Cadillac or Chevrolet, you’re getting the same drivetrain and the same engine.
In the 1950s, the automobile market in the United States was dominated by three automobile manufacturers: Ford, General Motors, and Chrysler. Despite a handful of car manufacturers, there have been numerous car brands, from Oldsmobile to Cadillac. This diversity was primarily an illusion that sold cars with the same components in different designs.
Most, if not all binary options brokers are the result of a similar illusion. They are the brands of several binary options manufacturers.
SpotOption is the same as regular motors but with binary options. They provide a platform. Binary options brokers add design and branding. But that’s all the broker does. If both brokers use the SpotOption platform, it makes little difference which one you use.
SpotOption provides the following services to its clients:
- Trading platform,
- Content management system,
- Customer Relationship Management (CRM)
- Payment solution integration
- Risk management solutions.
As you can see, this list contains everything you need to start brokering. Customer support, banking, the website itself – it has it all. You just need to create a name and design the details while SpotOption does the rest.
In 2016, SpotOption claimed to have 300 brands or affiliates. All of these brands looked different, but were in fact the same broker. It doesn’t matter which of these brokers you choose. As soon as you deposit money into them, that money will eventually end up with SpotOption, and you will get your binary options, assets and payouts directly from SpotOption.
The most prominent SpotOption platform was Banc De Binary, which used to be the largest binary options broker in the world. Banc De Binary ceased operations in early 2017 after legal complaints from three continents. Other brokers using the SpotOption platform include:
- TradeRush,
- i option,
- Trader XP,
- Imperial Options
- VIP binary.
All of these brokers are essentially the same.
Of course, this list is incomplete, but you may be dealing with the SpotOption broker as you recognize the following factors:
- Additional trading tools. The SpotOption platform usually provides features such as profit, rollover or extension to manage your binary options post-investment.
- Transparent market movements, bulk buy and sell buttons. The SpotOption trading platform is designed to make trading easy and make the most of your trades. So you’ll see two big investing buttons: a green button that invests in rising prices, and a red button that invests in falling prices.
- The merchant’s selection indicator. Most SpotOption brokers use an indicator that represents the percentage of traders who have recently invested in an asset’s price rise or fall.
SpotOption allows clients to customize their trading platform. Every SpotOption customer will look a little different. There are full-featured pro-style trading platforms and lightweight platforms with fewer features and a cleaner look. Nonetheless, if you get a good feel for the general SpotOption look, you will quickly recognize SpotOption once you see it.
Why should I know SpotOption?
At first, the skills of binary options trading may seem unimportant. Who cares how to build a trading platform if the broker is a good platform? Well, that soon.
First of all, it’s important to understand what’s going on with your money. When you deposit with a broker using SpotOption’s banking solution, your money ends up with SpotOption and not with the broker. This is a huge difference, and means you should look into completely different companies when trying to determine whether or not you can trust the people handling your money.
This is the business side. But there are so many more reasons to understand SpotOption and the business idea behind it. Let’s look at the three most important.
- You can better understand the relationship between brokers. There is no need to compare two brokers if they are essentially the same. Instead of being overwhelmed by hundreds of brokers, we know that over 300 identical brokers make it easier to find the right one.
- Better understand the risks of trading with a particular broker. SpotOption’s most important client, Banc De Binary, was forced to cease operations after many governments went out of business. All other SpotOption brokers use the same basic system, so you know everything you need to know.
- Better understand the value of an independent broker. Not all brokers use platform providers. Some do it all themselves. This broker can accept government regulations and is the most reliable broker in the market. Unlike most platform providers, we recommend choosing one of these brokers as they provide an honest trading environment.
SpotOption is not the only platform provider for binary options. Companies like TechFinancials and TradoLogic offer similar services. Its most popular brand is 24option, which sponsors soccer Juventus and partners with tennis legend Boris Becker. We recommend learning more about these providers to fully understand the world of binary options.
Why is SpotOption a problem?
As the Banc De Binary example shows, there are serious problems with the SpotOption service. Here’s what you need to know.
- In 2015, SpotOption marketed its service as a complete financial game. This is our approach to binary options – focusing on the gaming side rather than the investing side. Many people are paying money for gambling services. So what about financial gambling games? The problem is that most SpotOption clients do not communicate this aspect of their business clearly. They promise quick profits and a simple trading environment, which SpotOption does not offer. As a trader you need to know that. Stay away from SpotOption if you want to invest.
- Two of SpotOptions sales managers have released internal documents that show that 80% of all traders who signed up with one of the SpotOption brands lost everything invested. Gambling sites are fine. Most people who bet on sports also lose money. However, if you want to invest, stay away from SpotOption. Use only money you can afford to lose, and be aware that you are likely to lose.
In short, SpotOption is a questionable business. Better to stay away. There are other binary options brokers out there and they sign much better with one of the legitimate ones. For a list of trusted government regulated brokers, see our broker list.
What are digital options and why are they important?
As already pointed out, SpotOption has recently been facing legal issues. The most popular brand, Banc De Binary, had to be shut down as many governments cracked down on its services. To face these legal challenges, SpotOption has created a new product called Digital Contracts that meets governmental requirements.
The digital contract is essentially a branded version of the previous SpotOption service. They offer a few new fixes, like new payouts and expiration models, but so far there’s no indication that the service is more trader-friendly.
There is not enough data yet to judge the new SpotOption service. So it’s better to be careful. There are brokers you can trust, so why use a service you’re not sure if it’s legit?
SpotOption verdict
SpotOption is a difficult subject. On the one hand, it has contributed significantly to the rise of binary options, which has led to the creation of many good brokers. On the other hand, SpotOption itself is a questionable business, boasting how many traders lose money.
We recommend staying away from SpotOption and many brands. Choose a reliable and government regulated broker and you will be fine. Our broker list is a good starting point for your search. Major brands create their own platforms without relying on underlying technology.
