Over the past 8 years, we have seen numerous binary options brokers setting up and then closing down their operations. However, this has not stopped new brokers from joining the industry every other day. Competition among the brokers may be good for traders in terms of choice but because of the large number of new brokers joining the scene each month, many new traders are having a difficult time finding a broker that they can depend on. The safest bet instead then would be to go for a well established binary options broker with a good track record. In this review, we will look at two such brokers namely 24Option and OptionFair and see which one of these two brokers fares better for its traders.

Brokers’ Corporate Background

To start our review off, we will begin by looking at the history of these two leading binary options brokers. The 24Option brand was founded in 2010 and is owned by a Cyprus Investment Firm (CIF) called Rodeler Limited. Their headquarter is located at   #39 Kolonakiou St., Ayios Anthanasios, Cy-4103 Limassol, Cyprus. This puts the trading platform under the jurisdiction of the Cyprus Securities Exchange Commission (CySEC). They operate with the CIF license number 207/13.

Incidentally, OptionFair was also established in 2010, the same year as 24Option. The OptionFair brand is however owned and managed by a company called B.O. Tradefinancials. The corporate headquarter is also located in Cyprus but in a different city at Ioanni Styliamou 6 2nd Floor, Office 202 2003 Nicosia. However, OptionFair has set up the operation center at 1st Floor, Kyriakos Tower, Kosta Hadjikakou 1 4107 Agios Athanasios, Limassol, Cyprus. As a CIF, OptionFair is also regulated by CySEC under the license number # 216/13. What is interesting about OptionFair is the fact its holding company B.O. Traderfinancials is a subsidiary of TechFinancials Inc, an London Stock Exchange listed company and the binary options trading platform provider for both 24Option and OptionFair.

Trading Platforms

As mentioned earlier, both 24Option and OptionFair use the TechFinancials powered trading platform. This means that both brokers have the same pros and cons regarding their trading platforms.

In a side-by-side comparison, it is not surprising to see that both brokers’ trading platforms look similar with regards to the user interface except for the color scheme. With OptionFair’s user interface, the colors are cooler as opposed to 24Option choice of warmer colors. Perhaps it is a trick of the eye but at a glance, OptionFair’s user interface looks more pleasing and less cluttered. Somehow, 24Option’s user interface seems a little overcrowded and hence more distracting.

Another interesting thing that can be noticed about the screenshots of both trading platforms is the big difference in the payout for the same asset, the EUR/USD. Although both these screenshots were taken within minutes of each other, we can see that OptionFair offers a higher payout at 81% as compared to 24Option’s 70%. Anyway, we will look more closely at the payout ratios offered by both brokers later on in this review.

Mobile Trading

As for support for mobile trading, both brokers have also provided mobile trading apps for iOS and Android powered mobile devices. The respective trading apps for both these brokers can be downloaded at Google Play Store and Apple App Store.

Trade Types

Since both OptionFair and 24Option are using the same trading platform provided by TechFinancials, it is only natural to expect the options contracts types offered by both brokers to be the same. Both these brokers have 4 main types of options contracts namely Classic High/Low options, Short Term options, One Touch options and Boundary options. Both brokers also offer their traders the ability to trade spot Forex and CFDs on their trading platforms.While the options contracts types are the same, the choice of expiry times differs greatly between the two brokers. As we can see from the screenshot below, OptionFair definitely has more expiry times to choose from as compared to 24Option.

From our trading example on the EUR/USD, 24Option has a total of 11 different expiry times while OptionFair has 17 different expires times with the longest expiry time being a year. 24Option’s longest expiry time offered on the EUR/USD was just slightly under a month.

Account Types

In terms of trading accounts, 24Option is the clear winner here. They have provided their traders with a choice of 6 different types of trading accounts. The trading accounts come in the form of a “Basic account”, “Silver account”, “Gold account”, “Platinum account” and “Diamond account”. These different types of trading accounts all come with different incentives for the account holder. The basic account only provides you with access to the trading platform and basic trading education. At the top end of the scale which is the diamond account, you get better returns on your investments, live training sessions, a customized trading platform personal coach, the ability to trade FX/CFDs and tickets to Juventus’ football matches.

In comparison, OptionFair has only provided one standard type of trading account for their traders. They do not make any differentiation between their traders and all of them have access to the same benefits such as trade alerts through SMS and emails and the same level of trading education. Hence, although OptionFair does not provide as many types of trading accounts as 24Option, their traders, especially those are just beginning to trade benefits from the equal access to all the trade benefits and education.

In terms of the demo account facility, both 24Option and OptionFair have this trading facility for their traders. The requirement to access the demo facility is the same for both brokers. You are required to register and then place a minimum initial deposit before access to the demo is granted.

Minimum Deposit

In the online trading industry, the minimum deposit is a standard industry practice that is imposed by brokers on traders before they can begin live trading. It is the minimum amount which a person must deposit with the broker before his trading account can go ‘live’. 24Option stated on its website that their minimum initial deposit requirement is $250. However, it should be noted that this requirement applies to the basic trading account and not any of the higher account levels offered by 24Option. In other words, with a $250 deposit, you only have access to basic trading facilities at 24Option.

In contrast, OptionFair requires a slightly higher minimum initial deposit of $350 in order for traders to go ‘live’. Although this amount is slightly higher than 24Option’s minimum initial deposit requirement, it should be borne in mind that OptionFair doesn’t discriminate between their traders regardless of how much they deposit into their trading account. And as a result, OptionFair’s traders all have unrestricted access to all the tools and facilities provided by the broker. In this respect, OptionFair is a better broker for a beginner trader since he is less likely to commit more funds towards his binary options trading activities until he has learned more about how to trade binary options properly.

Payout Ratio

One of the most notable differences between 24Option and OptionFair is the payout ratio offered by them. For 24Option, the maximum payout ratio is staggered according to the type of trading account the trader is trading from. At 24Option for the basic account, the maximum payout ratio is just 82% and goes up to 88% for the diamond account. With OptionFair, the maximum payout ratio is 91% which is probably the highest among all the brokers in the industry. Nevertheless, it is the average returns that matters. As we have seen from the screenshots of both trading platforms above, OptionFair offer their traders better value for their investments. In our example above, there is a difference of 11% for the same asset (EUR/USD) with the same expiry time. That is a big difference if we were to take in consideration that trading is not a one off affair. Imagine a $100 difference in returns each time you make a trade. Over a period of 10 trades, that $100 will accumulate to a total of $1000!

Assets Index

In terms of trading assets, OptionFair currently have slightly more than a dozen assets over 24Option’s coverage of the markets. In total, OptionFair’s asset index totaled at 147 different types of assets while 24Option’s asset index totaled at 131 assets. Below are the respective asset indexes of the 2 brokers:

OptionFair Asset Index

Forex	Commodities	Stocks	Indices
AUD/CAD AUD/CHF AUD/JPY AUD/NZD AUD/USD Bitcoin/USD CAD/CHF CAD/JPY CHF/JPY EUR/AUD EUR/CAD EUR/CHF EUR/GBP EUR/JPY EUR/NOK EUR/TRY EUR/USD EUR/ZAR GBP/AUD GBP/CAD GBP/CHF GBP/JPY GBP/USD GBP/ZAR NZD/CHF NZD/USD US Dollar Index USD/BRL USD/CAD USD/CHF USD/HUF USD/JPY USD/MXN USD/NOK USD/RUB USD/TRY USD/ZAR	Brent Oil Gold (XAUUSD) Gold/ JPY (XAUJPY) Gold/EUR (XAUEUR) Gold/Silver (XAUXAG) Platinum (PL) Silver (XAGUSD)	Adidas (ADSGn) Alibaba (BABA) Amazon (AMZN) Amex (AXP) Anz (ANZ) Apple (AAPL) AXA (AXAF) Azimut Holding (0MHJ) Baidu (BIDU) Barclays (BARCC) BBVA (BBVA) BHP Billiton (BHP) BNP Paribas (BNPP) Boeing (BA) BP (BP) Cisco (CSCO) Citigroup (C.SW) Coca Cola (KO) Disney (DIS) EBay (EBAY) Enel (0NRE) EXXON (XOM) Facebook (FB) Ferrari (RACE) FIAT (FCHA) Gazprom (GAZP) Gold Corp (GG) Goldman Sachs (GS) Google (GOOG) GoPro (GPRO) Herbalife (HLF) Honda Motors (HMC) HSBC (HSBAL) IBM ICICI Bank (ICBK) Intel (INTC) JPMorgan Chase (JPM) MasterCard (MA) McDonalds (MCD) Microsoft (MSFT) MOL PLC (MOLB) Netflix (NFLX) NIKE (NKE) NK Lukoil OAO (LKOH) Norilsk Nickel PAO (GMKN) Orange France (ORAN) OTP Bank (OTPB) PAO Severstal (CHMF) PayPal (PYPL) Pepsi (PEP) Pfizer (PFE) Priceline (PCLN) Renault (RNOp) Richter (GDRB) Rio Tinto Royal Dutch Shell plc (RDSA.L) Samsung (005930.KS) Samsung Electronics (SMSN:LI) Sberbank (SBER) Siemens (SIEGn) Silver Wheaton (SLW) Societe General (SOGN) Sony (6758:JP) Sumitomo (8316: JP) Tata Motors LTD (TAMO) Telecom Italia (0H6I) Telefonica (TDET) Tesco (TSCO) Tesla (TSLA) Toyota (TM) Twitter (TWTR) Visa (V) Vodafone (VOD) Volkswagen (VOWG) Westpac Banking (WBC) Yahoo (YHOO)	ASX 200-Future (AUS200) Bombay- 30 BOVESPA (BVSP) BUX CAC 40-Future (F40) DAX 30- Future DOW Jones (DJI) DUBAI (DFMGI) FTSE 100- Future Hang Seng Future (HK50) IBEX 35 (IBEX) IBEX- Future Kuwait Index (KWSE) MIB 40- Future (FTSE MIB) MICEX (MCX Nasdaq 100 (NDX) Nifty- Future Nikkei 225-Future (JP225) Oman Index: (MSM 30) Qatar Index (QE) RTS Index (RTSI) S&P 500 (SPX) SMI- Future (SWI20) South Africa 40 – Future: (JSE) TA-25 (TA25) TADAWUL (TASI) TOPIX500 (TPX500)

24Option Asset Index

Forex	Commodities	Stocks	Indices
AUD/CAD AUD/CHF AUD/JPY AUD/NZD AUD/USD CAD/CHF CAD/JPY CHF/JPY EUR/AUD EUR/CAD EUR/CHF EUR/GBP EUR/JPY EUR/NOK EUR/TRY EUR/USD EUR/ZAR GBP/AUD GBP/CAD GBP/CHF GBP/JPY GBP/USD NZD/CHF NZD/JPY NZD/USD USD/ SEK USD/CAD USD/CHF USD/JPY USD/MXN USD/NOK USD/RUB USD/TRY USD/ZAR	Coffee Futures Copper Futures Corn Futures Crude Oil Futures Gold (XAU/USD) Platinum Futures Silver (XAG/USD) Sugar Futures XAU/EUR XAU/JPY XAU/XAG	Alibaba Amazon Amex (American Express) ANZ Apple Apple Inc. AXA SA Baidu Barclays PLC BBVA Beiersdorf BHP Billiton BMW BNP Paribas British Petroleum PLC Citi Group Coca Cola Deutsche Bank Deutsche Lufthansa E.ON EBay Enel Exxon Facebook Ferrari Fiat France-Telecom Gazprom Pao Google Inc. GoPro HSBC IBM ICICI Bank Ltd JPMorgan Chase & Co LinkedIn McDonald’s Microsoft Netflix Nike Nokia Orange France PetroChina Rio Tinto Rosneft Royal Dutch Shell A Samsung Electronics SberBank Schlumberger Societe Generale Sony Sumitomo Tata Motors Ltd Tesco Tesla ThyssenKrupp Twitter Inc Unicredit Vodafone Walt Disney Westpac Banking Corporation Yahoo!	AEX Index ASX 200 Futures Bombay 30 CAC 40 Futures DAX 30 Futures Dow Jones 30 Futures Dubai Index FTSE 100 Futures Hang Seng Future IBEX 35 Futures KOSPI 200 Kuwait Index MIB 40 Futures MICEX MSM 30 Index Nasdaq 100 Futures NIFTY Futures Nikkei 225 Futures Qatar Index RTS Index S&P 500 Futures SMI Futures South Africa 40 Futures TA-25 Index Tadawul Index

Bonuses

In terms of bonuses, 24Option’s bonuses are dependent upon what has been deposited by the trader. For a deposit between $250 and $499, a bonus of 20% is awarded. For a deposit of $500 to $999, a bonus of 30% is awarded. The percentages increase until a maximum bonus of 100% is awarded for deposits above $5000. The bonus for OptionFair is structured along similar lines as that of 24Option in that it depends on the amount that has been deposited. However, OptionFair maximum bonus is capped at 50% or $5000.

The wagering requirement for OptionFair’s bonus withdrawal qualification is set at 40x the bonus value for binary options trades and at 50x the bonus value if the bonus is utilized for forex trades. For 24Option, the wagering requirement is fixed at 50x the bonus value regardless of whether the bonus is utilized for binary options trading or forex trades. Considering all the criteria to qualify for the bonuses as well as the wagering requirement, OptionFair’s bonus terms and conditions seem more flexible when compared to 24Option’s requirements.

Customer Support

For customer support, both 24Option and OptionFair are dedicated to providing the best possible support that they can offer to their traders. The methods of contacting the support teams are the same which is by email, live chat or the telephone. However, in terms of support provided at a domestic or local level, 24Option is able to provide better coverage by covering 17 different cities and countries. OptionFair’s coverage has so far only managed to extend to only 11 countries.  Of course, if you are an international broker, the more countries that you are able to support on a local level, then the better is the quality of your customer support service.  So clearly in the area of customer support, 24Option have a distinct advantage over OptionFair. 

Verdict

Overall, both 24Option and OptionFair have been able to offer top value to their clients. However, the subtle differences between them do draw a distinction in what they can offer their traders. The most noticeable differences are the payouts and account types offered. For those who want to invest with the bare minimum, then 24Option can meet their needs with their lower minimum initial deposit requirement. However for traders who are more concerned about the returns, then OptionFair would be a better choice.

References/Further Reading:

1. High-Frequency Trading Competition (Jonathan Brogaard, Corey Garriott)
2. Competition among Trading Venues: Information and Trading on Electronic Communications Networks (Michael J. Barclay, Terrence Hendershott, D. Timothy McCormick)
3. The Effect of Public Information and Competition on Trading Volume and Price Volatility (F. Douglas Foster and S. Viswanathan)
4. The supply chain trading agent competition (Raghu Arunachalam, Norman M. Sadeh)
5. Designing the market game for a trading agent competition (M.P. Wellman ; P.R. Wurman ; K. O’Malley ; R. Bangera ; S.-d. Lin ; D. Reeves ; W.E. Walsh)
6. The 2001 Trading Agent Competition (MICHAEL P. WELLMAN , AMY GREENWALD , PETER STONE & PETER R. WURMAN)
7. Softening competition through forward trading (P. Mahenca, F. Salanié)
8. Myths Associated with Closed-End Investment Company Discounts  (Eugene J. Pratt)
9. Foreign Investment,Market Structure and Competitive Behavior of Foreign Investment Company (Jiang Xiaojuan)
10. Mutual Fund Litigation–New Frontiers for the Investment Company Act (Meyer Eisenberg and Richard M. Phillips)
11. The Genesis of Home Bias? The Location and Portfolio Choices of Investment Company Start-Ups (Jerry T. Parwada)
12. Simple Technical Trading Rules and the Stochastic Properties of Stock Returns (WILLIAM BROCK, JOSEF LAKONISHOK, BLAKE LeBARON)
13. Security Analysis and Trading Patterns When Some Investors Receive Information Before Others (DAVID HIRSHLEIFER, AVANIDHAR SUBRAHMANYAM, SHERIDAN TITMAN)
14. An empirical examination of information, differences of opinion, and trading activity (Hendrik Bessembinder, a, Kalok Chana, Paul J. Seguin)
15. The impact of institutional trading on stock prices (Josef Lakonishok Andrei Shleifer Robert W. Vishny)
16. The Effects of Reporting Complexity on Small and Large Investor Trading  (Brian P. Miller Indiana University)
17. Ownership structure, investment, and the corporate value: An empirical analysis  (Myeong-Hyeon Cho)
18. Does Algorithmic Trading Improve Liquidity? (TERRENCE HENDERSHOTT, CHARLES M. JONES, ALBERT J. MENKVELD)
19. Rise of the Machines: Algorithmic Trading in the Foreign Exchange Market (ALAIN P. CHABOUD, BENJAMIN CHIQUOINE, ERIK HJALMARSSON, CLARA VEGA)
20. Algorithmic Trading and the Market for Liquidity (Terrence Hendershott and Ryan Riordan)