Even if you’ve never heard of SpotOption, as a binary options broker, you’ve probably already deposited money with them. Therefore, you need to know the firm. This article explains the details of SpotOption’s business and how it affects you as a binary options trader.

 

 

In detail, this article answers these questions:

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

With this information, you will be able to understand who SpotOption is and how to deal with the hidden realm of binary options.

Who is SpotOption?

SpotOption is a ‘platform provider’ for binary brokers. This means that they offer their clients the software, the banking, and almost everything else that binary options brokers offer. There are only a few platform providers that create the systems that most brokers use, and SpotOption is one of the biggest of them.

Think about car brands to understand the system. 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 are different on the surface – they look different and have different interiors – the actual car is often identical. 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 American car market was dominated by three car manufacturers – Ford, General Motors and Chrysler. Despite the few car manufacturers, there were many, many car brands – from Oldsmobile to Cadillac, and so on. This variety was mostly an illusion that sold cars built from the same components in different designs.

Many, but not all binary options brokers are the result of a similar illusion. These are the trademarks of some binary options manufacturers.

SpotOption does the same thing as General Motors, but with binary options. They offer the platform; binary options brokers add their designs and their branding. But that’s all the brokers do. As long as two brokers both use the SpotOption platform, it makes little to no difference which one you use.

SpotOption offers these services to its clients:

  • Trading Platform,
  • Content management system,
  • Customer relationship management (CRM),
  • Integration of payment solutions, and
  • Risk management solution.

As you can see, this list contains everything you need to start a broker. Customer service, banking, the website itself – it’s all there. All you have to do yourself is compose a name and design some details; SpotOption does the rest.

In 2016, SpotOption claimed to have 300 brands or affiliates. These brands all looked different, but they were effectively the same broker. It doesn’t matter which of these brokers you choose, once you deposit money with them, the money will eventually end up at SpotOption, and you will get your binary options, your assets and your payouts directly from SpotOption.

The most prominent SpotOption platform was 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,
  • Empireoption, and
  • VIP Binary.

All these brokers are essentially the same thing.

 

 

Of course, this list is incomplete, but you are probably dealing with a SpotOption broker when you recognize these elements:

  1. Additional trading tools. SpotOption platforms usually offer functions such as profit, rollover or extension that allow you to manage your binary option after investing.
  2. Transparent market movements, large buy and sell buttons. The SpotOption trading platform is designed to make trading easy and allow you to trade as much as possible. Therefore, it displays two large investment buttons – a green button to invest in rising prices and a red button to invest in falling prices.
  3. Indicator of the trader’s choice. Most SpotOption brokers use an indicator that shows the percentages of traders who have recently invested in rising or falling prices for an asset.

SpotOption allows its clients to customize their trading platforms. Each SpotOption client will look a little different, and there is a pro-style trading platform with all the features and a light platform with fewer features and a cleaner look. Nevertheless, once you have a good feel for the typical SpotOption appearance, you will be able to quickly recognize a SpotOption when you see one.

Why should I know SpotOption?

At first, the technical aspects of binary options trading may seem unimportant. 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 going on with your money. If you deposit with a broker that uses SpotOption’s banking solution, your money will end up with SpotOption and not with the broker. That’s a big difference, and it means you should look into a whole different business when you’re looking to trust the people handling your money.

This is the business side. But there are many more reasons why it is important to understand SpotOption and the business idea behind it. Let’s look at 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 the hundreds of brokers out there, understand that over 300 of them are the same, making it easier to find the right broker for you.
  2. You can better understand the risks of trading with certain brokers. Banc De Binary, the main client of SpotOption, had to cease its operations after many governments cracked down on the business. Since all other SpotOption brokers use the same basic system, you know everything you need to know about you.
  3. You can better understand the value of independent brokers. Not every broker uses a platform provider. Some do everything for themselves. These brokers can accept government regulations and are the most reliable brokers in the market. We recommend choosing one of these brokers because they offer 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 most popular brand of these providers is 24option, which sponsors soccer giant Juventus and collaborates with tennis legend Boris Becker. We also recommend more about these providers to gain a complete understanding of the world of binary options.

Why is SpotOption a problem?

As the example of Banc De Binary indicated, there are serious problems with the SpotOption service. Here are the ones you need to know.

  • In 2015, SpotOption markets its service as the perfect financial game. This is their approach to binary options – they concentrate on the gaming aspect over the investment aspect. In itself, this is fine – many people pay money for gambling services, so why not a financial gambling game? The problem is that most of SpotOption’s clients fail to communicate this aspect of their business. They promise quick profits and a simple trading environment, which is not provided by SpotOption. As a trader, you need to know this. If you want to invest, stay away from SpotOption.
  • Two of SpotOptions sales managers released internal documents showing that 80 percent of all traders who signed up for one of SpotOption’s brands lose everything they invested. That’s okay – for a gambling site. Most people who lose on sports betting also lose their money. But if you want to invest, stay away from SpotOption. Use only the money you can afford to lose, and know that you will most likely lose.

In short, SpotOption is a dubious business. We recommend that you stay away from there. There are other binary options brokers out there and you are much better off signing with one of the legit ones. We recommend that you trust a list of brokers that are regulated by the government.

What are digital options, and why are they important?

As we have already pointed out, SpotOption has recently faced legal issues. Their most popular brand, Banc De Binary, had to close due to many governments abandoning the service. To face these legal issues, SpotOption has created a new product called digital contract which is supposed to meet government requirements.

Digital contracts are basically a new version of the old SpotOption service. It offers some new modifications, for example a new payout and expiration model, but so far there is no indication that the service has become more merchant-friendly.

There simply isn’t enough data yet to rate the new SpotOption service. Therefore, we recommend caution. There are reputable brokers out there, so why use a service where you are unsure if it is legit?

SpotOption Statement

SpotOption is a difficult subject. On the one hand, it 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 dubious company that brags about how many of their traders lose all their money.

We recommend staying away from SpotOption and its many brands. Choose a reputable government regulated broker and you should be fine. Our broker list is a good starting point for your search. The leading brands all create their own platforms – and don’t rely on an underlying technology.