The United Kingdom is renowned for its prominence in the global financial markets, which has not only led to the rise of the UK as the financial centre of the world but has also led to the country making its presence felt in almost all financial products in the world. The UK is predominantly the most preferred destination in Europe for all financial activities, along with the country’s open policies towards adopting new and innovative products without any significant regulatory hurdles.
The UK has an open attitude towards binary options trading, but is the product legal and regulated in the UK? Are there any security concerns while trading with binary options brokers in the United Kingdom? We attempt to answer some of your questions and concerns on how binary trading in the UK can affect you from a financial point of view, and whether it is indeed safe to invest in binary options.
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Binary Options Trading In The UK
The UK is one of the few nations in the world that has made all products related to gambling and betting legal for its citizens. The UK has an open policy that readily accepts any financial or investment products, provided they do not cause any severe repercussions to the UK’s economy. In this regard, binary options trading is a legal and approved activity in the UK. Binary options trading is considered to be in the same league as financial spread betting and online gaming, which brings it under the purview of different regulatory bodies.
There are several advantages of trading binary options for UK traders. Here are some of the unique advantages:
- Traders can enjoy some tax benefits, as products such as spread betting and online gambling are tax-free in the UK. Some products also enjoy zero stamp duty.
- Traders from the UK are free to invest in any international broker, as they are not legally bound to invest or trade with companies based out of the UK.
- Binary options trading is an entirely legal and compliant product.
- Traders have more options, such as higher payouts, better trading platforms, and amazing features.
Binary options trading involves investing in financial products that are traded on different global markets. These products can range from Forex, commodities, shares, indices, bonds, ETFs, and even CFDs, which gives ample opportunities for traders to invest in their favourite asset, without actually owning them. The inherent quality and nature of binary options trading make it feasible for investors to trade binary options in UK, without worrying about the legality of trading.
Binary Options Assets & Trading Features At Binary Brokers From The UK
UK Binary Options brokers are popular for their high payouts, incredibly attractive choice of instruments, and the best set of trading features that are hard to be found from brokers located in any other part of the world. Traders are not bound by any regulatory restrictions, which further add to the overall allure of binary options trading in the UK. Top UK brokers offer several financial products from the currencies, commodities, stocks, and indices market, with several companies now offering the convenience of trading several new markets such as cryptocurrencies, ETFs, and bonds.
The payouts are also equally attractive, as companies in the UK offer up to 95% returns for profitable trades. Some brokers also offer an opportunity to earn refunds on losing trades, but such options may have lower payouts and are more suited for low-probability trades. Nevertheless, UK traders can always make use of the several trading features offered by brokers based out of the country, or choose to invest in international or overseas brokers to open an account that is more suited to their preferences.
There are a few Forex and CFD brokers operating out of the UK that also provides binary options and spread betting products to investors from the UK. These products are offered only to qualified investors, as there is a chance that traders from other countries may be denied such access. Even neighbouring countries from the EU impose several restrictions on financial betting and binary options trading, which forces binary options companies located in the UK to implement regulatory changes to suit the EU guidelines.
Binary Options Platforms For UK Traders
Binary Options trading companies in the UK have a varying portfolio of platforms and trading interfaces. Companies are known to adopt both proprietary, as well as third-party binary options trading platforms, so as to ensure that they offer unique trading products to meet the growing demand from the competition. Several leading binary options brokers in London and other parts of the UK opt to provide third-party platforms such as SpotOption to offer one of the best trading environments, while companies may also choose to develop a standalone interface to better align their platforms according to their company’s overall theme and objectives.
Mobile traders also get access to a wide range of trading platforms, especially for Android and iOS devices, ensuring complete platform compatibility for a majority of smartphones and tablets in the market. However, Apple has recently changed a few policies concerning their App Store, which outlaws binary options trading apps for iOS users. Instead, Apple has recommended companies to offer a web-based browser, which allows brokers to offer the best compatibility for both desktop and mobile devices.
UK Binary Options Brokers – Payments & Bonuses
Binary brokers in the UK are generally more expensive than other mainstream brokers, as several UK-based companies may seek a higher initial deposit. Traders should expect to invest a minimum of $500 for a trading account, which is higher than the average deposit requirement for most mainstream Forex brokers. Brokers provide the option of maintaining an account in different base currencies that include the US Dollar, the GBP (Pound), and the Euro.
Despite the more expensive account options, there are a number of different payment options, which allow traders to deposit or withdraw funds through debit/credit card payments, bank wire transfers, e-wallet processors, and money transfer services. Brokers are also legally bound to follow all AML policies and ensure the safety of funds through numerous laws, which protect investments from any financial scams or fraudulent practices.
The UK authorities have not outlined or implemented any policies that prevent brokers from taking part in any promotional programs. Therefore, binary options companies based out of the UK can offer any number of bonuses and are free to promote any campaigns to attract new clients. Of course, the ultimate beneficiary may not always be the trader, as some brokers have several trading restrictions and bonus conditions for traders that accept a bonus. Regardless, UK brokers may be able to provide an excellent bonus or trading credits that can match up to 100% of the deposit.
Binary Options Broker Regulation In The UK
The UK has stringent laws and policies for regulating companies operating in the financial markets, which are supervised by an autonomous UK agency known as the Financial Conduct Authority (FCA). The FCA is a premier agency in the global financial markets, which has built up a positive reputation in the EU. Even several investors from across the world have come to trust the FCA for their authenticity and investor-protection laws, which not only help in avoiding financial scams but also helps in enhancing trust and confidence among investors. The FCA is a part of the European Markets in Financial Instruments Derivatives (MiFID) and the European Economic Area (EEA) initiative, but the changes in British laws after the Brexit may affect the FCA’s affiliation with these agencies in the future.
Although the FCA is responsible for regulating and licensing a large number of binary options brokers in the UK, it is also common for the UK’s various internal gambling supervising agencies to issue licenses to entities operating as a gaming company. The most popular gaming supervision commission of the UK is the Isle of Man Gambling Supervision Commission, which has issued licenses to several binary options trading companies. Therefore, traders must ensure that trading binary options as a gaming product is legal in their country, before opting to sign up for an account or commencing trading operations.
Although binary options trading may have some core differences in the way they are licensed and regulated in the UK, traders should enjoy a positive trading experience. If traders are not comfortable with the gambling nature of the product, traders from the UK are also free to open and maintain an account at any other EU-based binary options brokers.
Advantages Of Choosing UK Binary Trading Companies
- Localised Presence For UK Binary Options Traders – Traders from the UK and the EU will find it easier to trust a company that is located in the UK, especially as far as the safety of their investments is concerned. The familiarity aspect of working with a local company will undoubtedly yield better peace of mind for traders.
- Protection Of Funds Through The FCA Or Similar Agencies – The UK has one of the best environments that ensure the safety of funds. The UK has witnessed a drop in financial scams over the past few years, which help in showcasing the UK as a safe investment destination.
- UK’s Prominent Position In The Financial Markets – UK is at the forefront of the financial markets, which prompt companies choose to base their headquarters out of the UK. Having a UK presence is found to improve conversions for brokers, and companies may spend that extra bit of money to improve their overall market exposure.
- Better Services For International Traders – Overseas investors are free to trade with UK regulated binary options brokers, unlike its EU counterparts, and offer unrestricted access to the markets. As a result, the UK is more popular as a broker destination, than any other country in the world.
- Has The UK Banned Binary Options Trading?
Binary options trading is still legal in the UK, as the country has legalised gaming, gambling, and betting products.
- Is Binary Options Trading Tax-Free?
All gaming products and spread-betting enjoy tax benefits in the UK, but these tax incentives are only available for residents and citizens of the UK. Traders from other countries may be subjected to tax according to existing laws.
- Do UK Binary Options Brokers Offer Mobile Trading Access?
Yes, most UK brokers offer access to different trading platforms, including access to dedicated apps for Android, Windows, and iOS operating systems.