Binary Options Regulated and Scam Brokers

[Roaming]

Talking for Real??

Don't know how brokers earn profits from SPREADS ??? Extra dollars that you named it, came from SPREADS 0.2-1.5 pips are MONEY for the broker in Forex and same for Dukas in BO when it's introducing it to its earnings formula. As much as the Volume is higher as much as the broker earns more.
For example equating it to Forex, 50 lots per position for 1 pip spreads = $50 in broker's pocket.
Calculate how much that can be when we know most brokers that have variable and fixed spreads starts from 2-5 pips and more. Lot of money

Then how do you think Forex brokers run its business?? especially the ones that have only spreads its fees. Others have commissions or both.

When brokers price for NZDUSD 0.8430 0.8432(lowest can be, many have it 4-5 pips), clients that are buying or selling doesn't matter for the broker, it is earning the 2 pips spreads from both. Briefly, SPREADS along Volume surely are brokers profits.
Brokers that are unregulated go to Scam because they have no enough clients base so no Volume, other than no regulatory body behind to watch, they prefer to go Scam, stealing clients money that is a matter of time, when they'll decide to go offline depends on how much money they have stole from clients or maybe they discovered someone tracking them officially.

 

[NanoAlpha]

You keep avoiding answering the question.

Yes, I know how brokers make profits from spreads in SPOT forex.

Please explain however how Dukas makes profits from spreads in BO.

Please stop talking about SPOT forex.

We are talking about BO here.

So again, in my example with trader A and B trading BO, please clearly describe where the so called spread profits that Dukas makes come from.

 

[Roaming]

Avoiding what?!! You hadn't understood the point yet!!

The damn Dukas earn profits from spreads in BO as in its ECN Forex.

Example of GBPUSD: other BO broker have it like this:

Call

1.6600

Put

Clients are clicking same price for call or put.

Dukas has it like this:

Call 1.6600

Put 1.6598

Buyers and sellers are getting 2 pip(or the number they give) difference from the market price. The 2 or so pip is the broker's profit.
There's too the 10% difference in payout for each client(buyer and seller), that's another profit for the broker, can consider or compare it to commission in its ECN Forex accounts.

Had not understood yet!!

 

[NanoAlpha]

I can understand why Dukas showing BO spread (for winning determination purposes) can confuse you into believing that Dukas actually captures that spread.

Saxo BO have spread - you can buy them and you can sell them.

Nadex BO have spread - you can buy them and you can sell them

Dukas BO do not have spread - you can only buy them. you can't sell them

An asset which can't be sold does not have a spread BY DEFINITION.

And to return to my example, you say that Dukas makes money on the spread, but you failed time and time again to show where the spread $ are. $200 go in to Dukas, $190 go out as payout to Trader A, $10 remain profit from the 100%-90% percent payout. ALL THE DOLLARS ARE ACCOUNTED FOR. THERE ARE NO SPREAD DOLLARS LEFT.

Anyway, I'm done with this aspect. Feel free to believe whatever.

 

[Roaming]

Dude, How with Dukas client can not sell an asset?
You are very confused, comparing Dukas to other binary options in spite told you others have one price for call and put, this is where your example might be right but when Dukas has different price for call and put because spread exists and gave you a clear example about it, you don't want to understand yet!

There is nothing more to add on my explanation. Maybe Pharaoh has better way of explanation, how brokers gain money from spreads?!!!!

 

[Pharaoh]

I'm happy to explain how forex brokers collect spreads. For Binary brokers, I just sort of viewed the area between call and put as a "no wager" zone, and don't know what happens if price ends up there.

What happens in binaries if the final price ends up inside the spread? Does the trader lose or is it considered as if the trade didn't happen and the original money is returned?

 

[noobtrader]

If I'm not wrong, as long as your order (call/put) is not in your desired 'zone', you lose your bet.

 

[NanoAlpha]

What happens in binaries if the final price ends up inside the spread? Does the trader lose or is it considered as if the trade didn't happen and the original money is returned?

At Dukas you lose. You also lose even if the price ends exactly on the strike. So for a CALL you need the BID to go over the strike (ASK) by at least 0.1 pips (the smallest increment).

There is a circumstance in which you get your money back - if not even a single price change (tick) occurred between the time when you bought the option and the time it expired. This is realistic only for the lowest durations (<3 min) in between the NY and Asian session.

OTOH Dukas didn't include the usual commissions in the spread. So it's usually very small (0.3 on E/U most times). Even at the most illiquid hours E/U still has an average 5 pips volatility, thus assuming a 0.5 pip spread at those hours, the spread is only 10% of the range. Easily beatable. At liquid hours the spread is only 2% of the range.

 

[Roaming]

I'm happy to explain how forex brokers collect spreads. For Binary brokers, I just sort of viewed the area between call and put as a "no wager" zone, and don't know what happens if price ends up there.

What happens in binaries if the final price ends up inside the spread? Does the trader lose or is it considered as if the trade didn't happen and the original money is returned?

Shamefully for Dukas, if expiry price is the same as strike price the client looses the trade.
It is as simple as in Forex for Dukas BO trading: for example EUROUSD Call 1.3185 Put 1.3184, if you Buy(Call) 1.3185, the expiry price must end above 1.3185 to win your money and payout, if you sell(Put) 1.3184, expiry price must end below 1.3184 to win your money and payout, anything at or out of the direction of your trade is a loss. Same as in Forex with a difference that there's no breakeven, the : if not even a single price change (tick) for breakeven is very rare to happen, needs maybe the 1 minute expiry, very low volatility and some luck.

There are always Pros and Cons in all brokers. Dukas Cons are this no breakeven(mainly), 3 seconds for the trade to open after click, no fixed execution time that might be a Pro for some but I think it needs much attention by the trader to look at the opening and closing time of the candle when executing an order especially in short time frames, setting a 1 to 60 minutes expiry time in the middle of a candle formation would be bad, this free setting of expiry time is somehow tricky. The spread is a con too especially when market is low volatile, better stay away of Dukas BO, maybe the 60 minute can be the only useful at that time. Other bugs may exist in Dukas BO platform, needs someone to test it and tell us.
The clear Pro is the 90% payout on all 13 pairs offered from EUROUSD to USDRUB, and traders money safe in a Swiss Bank.

 

[NanoAlpha]

Roaming, there are some factual errors in your response regarding Dukas:

1. The pricing is with 5 pips, not 4 pips

2. There are 18 Binary Options instruments now (6 new ones were added a few days ago)

3. The holding timeout after click is 5 seconds, not 3 seconds. But it's easy to protect yourself against spikes in this interval.

setting a 1 to 60 minutes expiry time in the middle of a candle formation would be bad

Maybe for technical traders. In my models I work 100% with tick data, I've stopped using candles a long time ago, so I actually like this aspect. I would even prefer being able to also specify the starting and finishing time to the second, not only to the minute, but I'm not complaining.

The 90% payout is technically variable, but I've never seen it otherwise (not that I've looked too much). At least they promise that this payout will be the same at one particular instance across all instruments, across all clients.