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UKOptions is one of the hot new binary options brokers on the scene and despite having only been in operation for a few years, it has already amassed quite a lot of attention. This is one of the more professional brokers we have seen, and using the advanced SpotOption trading platform (with mobile functionality!) which is extremely user-friendly and provides a high level of integration with other services such as account management and risk management tools. In this section, we will be taking a look at the withdrawal options and conditions available to traders who elect to use UKOptions as their binary options broker.
First, let’s take a look at the timeline of a typical withdrawal. After an account holder submits his or her request, UKOptions will take up to 3 business days to process said request. After that period, the funds will take a further 5 to 7 business days for the funds to reach the designated account. Therefore, the total withdrawal time from submission of request to receiving the money would be anywhere from 6 to 10 business days. Not slow, but not exactly fast either. We would rate its withdrawal timeline as ‘average’ at best, although we have reviewed some brokers where the total withdrawal timeline was as high as 8 to 15 business days!
Next, we will look at the minimum and maximum withdrawal amounts. The minimum withdrawal amount is $100 or its currency equivalent, while the maximum withdrawal amount is 20,000 units of your selected trading currency (either USD, GBP, or EUR). Due to exchange rates this would mean that the maximum withdrawal amount can actually vary quite greatly as GBP20,000 would be equivalent to $30,000. We further note that while there is no maximum threshold for deposits (for example, in order to qualify as a VIP member at UKOptions, the minimum deposit amount is $100,00!), there is one imposed for withdrawals.
In terms of fees imposed for withdrawals, currently UKOptions does not charge any fees on withdrawals via credit cards, and for withdrawals via wire transfers, the broker allows the customer one free wire transfer per month, with any subsequent transfer being charged a $25 fee. While this is not an unreasonable policy, we have reviewed other brokers which have waived fees for all wire transfers, so in this regard, UKOptions ranks below its competitors.
Like many brokers, UKOptions does impose conditions on withdrawals, particularly when it comes to bonuses. Most, if not all, binary options brokers offer their customers bonuses as incentives, which may come in the form of deposit matches, signing bonuses, investment matches, trading credits etc. While such bonuses are ostensibly free, there is no such thing as free money, and accounts that have been credited with bonuses also come with extra withdrawal conditions. Such conditions come in the form of minimum trading volume requirements, which stipulate that customers must have a minimum trading volume that is a multiplier of the total account funds of deposits plus bonuses credited. This is a standard practice across all binary options brokers; only the multiplier factor differs. In UKOptions’ case, its multiplier is 40x, which we view as on the higher side compared to other brokers.
In the event that a trader wishes to make a withdrawal on an account that has been credited with a bonus but has yet to meet the minimum trading volume requirement, UKOptions has stated that a special committee would review said requests and if a withdrawal is approved, UKOptions may impose a handling fee of up to 30% of the total account balance (minus trading benefits and any gained profits). This is left to the company’s discretion. Another withdrawal condition that UKOptions imposes is to disallow all withdrawals requested within the first 30 days of opening account. This is, in our view, a definite negative and a minus point when evaluating UKOptions against other brokers, most of which do not impose such a condition.
To conclude, we would rate UKOptions’ withdrawal policies and procedures as ‘Slightly Below Average’ when evaluated against its competitors on an overall basis. The factors behind such a rating are mainly its average at best total withdrawal timeline, high multiplier on minimum trading volume requirements to withdraw from bonus credited accounts, as well as a restriction on withdrawing any funds within the first 30 days of opening an account. While withdrawal policies and procedures is just one factor among many when assessing a binary options broker, it is nonetheless a very important one and traders should be aware of the various restrictions and conditions imposed by UKOptions prior to making a decision of opening an account with them.
UKOptions Minimum Deposit
So you have decided to undertake the exciting journey of binary options trading and want to know exactly how much funds you would need to start. Well, in this section we will be taking a look at the minimum deposit requirements for UKOptions.
The most basic minimum deposit is 250 units of your currency of choice, which would be either USD, GBP, or EUR. However, we would like to emphasize that while this is the minimum amount you can deposit into your account each time, this is not the amount you would require to open a trading account for the first time. To elaborate, UKOptions offers four different account tiers: Beginner, Experienced, Professional, and VIP, each with their own minimum deposits required to open the account. The minimum initial deposit required to open each of the account types are:
- Beginner: $1,000
- Experienced: $5,000
- Professional: $10,000
- VIP: $100,000
Only after choosing and opening your selected account type with that minimum amount is the minimum deposit thereafter for top ups 250 currency units of your choice. Of course, as the minimum initial deposit amounts for each account tier increases almost exponentially as you go up the ladder, UKOptions does attempt to incentivize traders to open the higher account tiers via the following incentives:
- Beginner: Up to $500 bonus, 1-on-1 training, and daily trading signals
- Experienced: Up to $3,000 bonus, 1-on-1 training, and twice daily trading signals
- Professional: Up to $7,000 bonus, 1-on-1 training, and thrice daily trading signals
- VIP: Up to $30,000 bonus, 1-on-1 training, thrice daily trading signals, UKOptions Rewards card, and a managed account
The payment methods available for making deposits (and withdrawals) are:
- Credit Cards: Visa, MasterCard, and Maestro
- Online Payment Systems: Neteller, Skrill, and CashU
- Wire Transfer
UKOptions also imposes a maximum deposit amount for deposits via credit cards. A customer is allowed a maximum of 3 card per account with 10 transactions per card per month. Each card is allowed a $20,000 max amount on each deposit with a total $50,000 maximum amount per card per month. Hence, using simple mathematics, we can calculate that if using credit cards, the maximum deposit amount per month would be $150,000. This should be more than sufficient for most, if not all traders, further, there is no maximum deposit amount if depositing via wire transfer.
We can conclude that deposit methods available under UKOptions are free and wide-ranging, which stands in contrast to their somewhat restrictive withdrawal conditions. This is of course, not surprising as all binary options brokers want to attract the maximum amount of deposits possible, however, we feel that restrictive withdrawal conditions can leave a bad taste in customer’s mouths so paradoxically, by making their withdrawal conditions more permissive, UKOptions may actually be able to attract more customers and deposits! After all, in the highly competitive landscape of binary options brokers all of which can seem largely undifferentiated from each other, providing customer service that goes above and beyond expectations may be the key to success.
At present time, Israeli residents will not be able to avail themselves of UKOptions services. As we have mentioned, the binary options brokers industry is largely unregulated space, which is why many potential customers are rightly worried about the potential of being scammed, and why review sites such as this one exist. While more and more brokers are moving toward regulation, particularly with CySec (the Cyprus Securities and Exchange Commission, under which many binary options brokers are registered) making a policy change in 2013 to include binary options under its list of regulated financial instruments. This is ultimately beneficial to the consumer as it increases the legal options available to them in the case of a dispute with the broker. It is also the reason why we strongly recommend on trading with licensed and regulated binary options brokers.
Well, why can’t Israeli residents use UKOptions services? The reason was in the past year, many unscrupulous binary options brokers have come under scrutiny after it was revealed in a journalistic exposé that many binary options brokers based out of countries such as Bulgaria and Romania were ultimately owned by Israelis, and further many of the brokers used unscrupulous tactics such as false credentials to lure customers into a false sense of security. This opaque ownership structure of such brokers were said to be an attempt to hide from regulatory scrutiny and oversight, as well as to avoid apparent blame in the event of litigation.
In an attempt to curb such practices, in May of 2015, the ISA which stands for the Israeli Securities Authority imposed a new law to regulate online financial trading industries. Under said law, companies such as binary options brokers that wanted to continue to offer their products to Israeli customers would have to first apply for a license from the ISA. Out of the 21 companies that applied for licenses, one was disqualified (its controlling shareholder fled to Cyprus to escape alleged financial misappropriation and is currently under house arrest in Israel) while a further two companies withdrew their applications, leaving 18. Out of the 18 applicants, 4 were binary options brokers and none of them have been approved more than a year later. It is highly unlikely that the ISA will approve such applicants anyway as the director of the ISA’s Exchange and Trading Platforms Supervision has issued statements that have been highly negative of the binary options industry as a whole.
Of course, in order to avoid coming under the regulatory purview of the ISA, binary options brokers need only avoid offering their services to Israelis, given that the ISA has no regulatory jurisdiction outside of Israel. This is the reason why binary options brokers are largely unable to offer their services to Israeli customers. This is unfortunate, as binary options trading can be a great way to make money; however, this is largely the fault of the binary options broking industry itself, as it allowed the unscrupulous and unethical actions of a few bad apples to paint the entire industry in a negative light. Should there be any change in regulatory practices, you can count us to keep you updated and informed.
Similarly to the above, UKOptions, as well as many binary options brokers, do not offer their services to USA residents. In the USA, binary options are typically not offered by individual brokers, but on exchanges, such as the NADEX, which is the first legal US exchange focused on binary options. Traders in the US can also trade binary options through the CBOE (Chicago Board Options Exchange).
It is only outside the US that binary options are offered through individual brokers, which is why you see many binary options brokers with a heavy European focus. From a legal perspective, for such binary options brokers to be able to solicit US residents for trading purposes, the broker would first have to register with a US regulatory body such as the SEC (Securities and Exchange Commission) or the CFTC (Commodities Futures Trading Commission). Hence, binary options offered on the NADEX or the CBOE are strongly regulated with full transparency.
The catalyst that triggered the move by US regulators to prevent unregistered binary options brokers from soliciting US customers was Banc de Binary, which began offering and selling binary options to US investors in 2010. Banc de Binary’s solicitation of US customers without going through the appropriate regulatory channels resulted in the SEC issuing an investor warning regarding binary options as well as joint court action with CFTC against the broker. This case was finally settled in early 2016, and resulted in an$11 million settlement with US authorities, consisting of $7.1 million in restitution and disgorgement, $2 million in civil penalties to the CFTC, and $1.95 million in civil penalties to the SEC.
The business model is also different compared to binary options brokers, in the US, as the binary options trade through an exchange, each trade requires a willing buyer and seller. The exchanges then obtain revenue via charging an exchange fee in return for matching said buyers and sellers. On the other hand, binary options brokers are the opposing side of the trade with their customers, and they make their revenues via the difference between payouts on in the money options versus the difference in refunds for out of the money options.
To give an example, the maximum payout rate for a traditional binary option bought from UKOptions is 85%, however if the option expires out of the money, the trader gets a 10% refunds (meaning the broker gets 90%). This difference of 5% is then UKOptions profit margin. When you take into account that 85% is the maximum payout rate and that the typical range for UKOptions is 70% to 85%, then we can see that UKOptions profit margin would be in the 5% to 20% range! Again, this is not confined to UKOptions; all binary options brokers utilize this business model, and this is something that customers should be aware of. This does not mean that traders cannot profit from binary options trading, it just means that the payout ratios will always be skewed in favor of the broker, as that is how they make their money.
Interested parties who may be considering UKOptions as their binary options broker of choice should not hesitate to make use of such options, even if they are not a current customer. This is because the quality of support offered by a broker can often be a reliable indicator as to the quality of customer service one can expect upon signing up. Therefore, we encourage people to ask as many questions as possible to the support people of said brokers prior to signing up, both to gauge the quality of their customer service, as well as to fact check the information provided by said service against the information provided by review sites such as this one. Should there be a discrepancy in the information, it may be a sign that the broker is using unethical tactics such as providing incorrect information in an attempt to solicit customers, and said broker should be avoided.
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