Binary options are not prohibited in South Africa. They are treated as OTC derivatives, which means the counterparty needs an ODP licence — and no binary options provider currently holds one.
Archive notice: this page was written in 2013, before binary options were banned for retail clients across the EEA, the UK and Australia. It is kept for reference. For the current position, see Legal status by country.
There are thousands of binary options trading strategies to choose from, ranging from those which can expire profitably in a matter of seconds to those which require the investor to wait several hours or days. Binary options strategies are made even more appealing by the levels of profit that they can generate, ranging from a standard 80% to up to an attractive 500% on some forms of binary option. Trading in markets offering over 100% of the initial stake arguable takes a little bit more skill and understanding but there are a number of successful strategies which can be implemented fairly effectively without requiring an in-depth knowledge of the markets.
Which binary options trades exist offering big profits?
The first and most popular trading strategy to take advantage of higher-reward trading is using touch trading with binary options. These options are available during the week and often also during weekends. They involve purchasing options based on a bet that price will reach (touch) a specific level higher or lower than the current price over a specific time period. The potential rewards for this type of binary options trading can be anywhere from 250% up to 500% of the initial investment. The rewards for those who can exploit these opportunities are obvious and there are a number of ways in which binary options traders can maximise their potential to be successful using touch trading.
One of the key ingredients to all trading, but especially binary options touch trading is market volatility. This is used to explain how much general price movement there is in a market and for those looking for price to reach a higher or lower level the higher the volatility the better. The key generator of this volatility if news and information released to the markets and which cause speculators to take short or long positions on investments. As with any unexpected news, the market participants tend to overreact for a short time, either dumping their investments like a hot potato or furiously buying as price climbs higher and higher. These, often large, swings allow the market to reach the 500% profit areas for those insightful enough to purchase touch options at a price significantly lower or higher than the current price.
Touch trading the news
Looking for large market swings in order to take advantage of the many multiples of profit which can be gained involves having a reasonable foresight and a speculative edge. Ironically, many successful touch traders find that they can exploit negative positions, when price falls heavily on bad news, easier than good news. The key to spotting profitable opportunities is to be able to assess the impact of a future news release or react fast enough to breaking news stories. Stock and commodity binary options are very good examples of this assessment.
Examples of how to trade binary options and the news
Supposing that a motor company has to recall it signature car amid safety concerns, or conflict breaks out in the Middle East, this would reasonable cause a large spike down for the motor company and up for the price of crude oil. Whilst these events january be difficult to predict it is highly likely that price will move rapidly towards a profitable touch zone. Easier methods of trading these news releases are to purchase touch trades either side of the price towards a foreseen news event. If price volatility is large enough, which is often the case with US employment figures, company trading results etc. just one successful binary options touch trade from the two places (as long as returns are higher than 100%) will result in a profit. Lucky binary options traders january see this volatility touch both profit levels for an extraordinarily profitable trade.
Funding and withdrawals in South Africa
Local rails here are instant EFT, card, and local bank transfer through Ozow or PayFast. Deposit method decides whether money can come back out: card payments carry a chargeback route with a time limit, transfers to an offshore entity generally do not. Confirm the withdrawal method, minimum, fee and stated processing time in writing before funding an account. Profits are generally taxable, with SARS the relevant authority.
Brokers accepting South African clients
Ranked by our published methodology, which weights licensing at 35% — on an unsupervised counterparty every other quality is contingent. Ratings are derived from the sub-scores, not assigned.
| # | Broker | Rating | Entity holding your funds | Min. deposit | Payout | |
|---|---|---|---|---|---|---|
| 1 | Deriv | 7.9 | Deriv (BVI) Ltd / Deriv (V) Ltd | $5 | up to ~95% on synthetics | Visit |
| 2 | IQ Option | 5.1 | IQ Option Ltd (international) — unregulated | $10 | up to ~95% | Visit |
| 3 | Pocket Option | 4.7 | Gembell Limited (Comoros) | $5 | up to ~92% | Visit |
| 4 | Quotex | 4.6 | Awesomo Ltd — unregulated | $10 | up to ~98% | Visit |
| Regulated alternative — does not offer binary options | ||||||
| — | Exness | 8.8 | FSCA (South Africa) — ODP · FSP 51024 | $10 | n/a — CFDs and FX only | Visit |
Advertiser disclosure: buttons marked ad are affiliate links and earn us a commission if you open an account. The others do not. The ranking is derived from the published sub-scores either way, which is why the highest-rated provider here is not the one that pays us.
Risk warning: binary options are high-risk speculative instruments and most retail accounts lose money. Nothing on this page is investment advice or a recommendation to trade.