Binary Options Trading South Africa
Binary options trading in South Africa has become and increasingly popular market in recent years as more and more investors seek to open online trading accounts. As awareness of this particular method experiences growth so does the number of international brokers offering their services.
Binary trading is unregulated and as such local South African companies are prohibited from offering their services to SA traders. However, through our extensive knowledge of the binary options industry and the rules and regulations that apply to trading we can still show you great brokers to trade with.
Our team of experts have searched the internet for the best brokers and we bring you only those with international licenses that are legally allowed to offer their services to South Africans. Our knowledge of all the legal requirements means we can answer any questions you may have to ensure that your trading career is a safe and profitable one.
Let's take a look at the key areas when it comes to South African trading, here we will:
- Reveal exactly what you should be looking for in an international broker
- Explore the legal issues and regulations that cover South African binary brokers
- Explain how local taxes and fees work on the profits of your online trading
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Local Broker Benefits
Like we found in Indonesia with regard to the law on binary options, trading in South Africa is perfectly legal. There is nothing that prohibits an individual from trading online. The industry is however unregulated which means that there is no protection offered to those who choose to trade. It also prevents genuine South African companies from brokering. So how do you choose a trader and what should you be looking for?
Licensing And Regulation
As there are no regulated South African brokers you are going to need to find an offshore broker. There are many European brokers that are licensed by CySEC, FCA, MiFID etc. Australia also have good brokers, look for an ASIC license. There are many to choose from, it's just a case of picking the right one for you.
Deals and Incentives
If you are new to trading then you should probably look for a broker that offers a no deposit bonus. This allows you to try before you buy, so to speak. There are also deposit bonuses and trading contests to look out for as well.
Mobile Trading Tools
Most people prefer to trade on the go therefore it is important to check out what mobile offering the broker has. Do they offer an app that is suitable for the device you are using and is it available for both iOS and Android? If you are keen to trade on the go then this is critical.
Free Demo Account
A demo account is important for a number of reasons. Firstly, it allows you to get familiar with the platform that you are going to be using. In addition to this, if you are using a reloadable demo, you can use it to try new assets and trade types.
The only way to legally invest and trade in binary options, in South Africa, is to use an off-shore broker. This means having to find one that has all the above benefits plus anything else that is important to you as an individual. That is where we come in. We provide you with only the best, most reputable brokers to ensure that your experience is a good one.
Legal And Regulation
Now whilst there are no legal issues that restrict South African citizens from trading there is unfortunately a lack of brokers local to the country. It is not a regulated industry, therefore there are no legal or licensed South African binary options brokers.
There are however plenty of good brokers off shore that have the relevant licenses and regulations. The ones to watch out for are those that are licensed by CYSEC or other European recognised licenses. In fact if you look out for those who are licensed in Europe you are more likely to find yourself a genuine broker.
Do not use a broker that doesn't have a license. There is a reason that they don't have one, they either can't get one or they aren't a serious broker doing things the right way. Why would you invest money with them if they haven't gone to the trouble of getting licensed?
Also make sure that any licenses are genuine. We have gone to the trouble of doing this with all of the companies that we review and recommend so you will be pleased to know that we only recommend genuine, trustworthy brokers that have a good reputation and history.
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Paying Taxes And Fees
When looking at the tax requirements surrounding binary trading, South Africa is much like any other country. If you are an individual then you will no doubt be paying Personal Income Tax. You could be paying anything from 18% for income below R160,000 up to 40% for anything over R617,000. Local tax applies to profits made on any kind of income and this includes binary options trading.
If trading is a second income, you will need to declare your income and ensure that you pay the correct tax on this amount. Remember to deduct any losses and work out your net profit so that you don't pay too much tax.
Now whilst binary options brokers aren't responsible for informing the South Africa tax department that you have made an income from trading, they will have a record of your transactions within your account. Make sure that you have access to this information as you will need it when calculating your total profit for a certain period of time. We recommend keeping a monthly record of deposits and withdrawals and recording all profits and loss.
Whilst African taxes are the main cost that you will incur there may also be other fees to consider. These fees include:
If you are making lots of deposits and withdrawals, the money will soon mount up. Consider making fewer, larger deposits and withdrawals to try and cut down on the number of fees charged.
How we Recommend Brokers
There isn't a choice of trading with a local broker for South African traders so if you wish to trade it is going to have to be with an offshore broker. Now this may seem daunting and perhaps a little risky but there are genuine SA brokers that offer a good service with good incentives. Our job is to simply make your experience a more beneficial one by reviewing and rating South African brokers across the market.
Like all of our broker ratings and our best binary options reviews we take into account every aspect of trading and what each broker has to offer. Firstly we look at their licensing and eligibility to trade. We only bring you brokers that have the correct licensing and operate within regulations and legislation. We want your trading experience to be profitable and without issue. We also examine the logistics of each broker.
Some of the key areas include how easy it is to open an account, how easy it is to navigate the trading platform and whether the mobile website and app is user friendly. We also examine what benefits each broker has to offer. Do they offer good bonuses, a good payout and what other rewards are available? For VIP / Premium traders we look at the higher end accounts and what they have to offer and how they compare to other offerings available.
We review brokers all over the world and when it comes down to it South Africa steps up pretty good. Our reviews are based on an extensive knowledge and experience of the online options market. Our team of experts have many years of trading experience between them and know exactly what to look out for. Our commitment is to only bring you the best South African binary options brokers on offer.
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Frequently Asked Questions
Is binary trading in South Africa legal and safe?
The answer to this is "yes" it is perfectly legal to trade binary options in most countries including South Africa. As it is unregulated though it is prohibited for South African based companies to become brokers. Brokers from outside can offer service to traders based in South Africa though. Regarding safety it is safe to trade as long as you choose a licensed broker. A broker that is licensed by CYSEC is a good place to start.
Do I need to pay taxes on my trading profits?
South Africa has tax laws and regulations as do most countries and it is important to abide by these rules and regulations to avoid large fines. Any earnings from binary options trading, after losses have been deducted, need to be declared if total earnings for the individual is more than the earning limit for tax. If the limit is exceeded then earnings should be declared as part of a self-assessment. Tax owed must then be paid by the deadline for payment.
Can I test brokers before trading with real money?
With a lack of South African brokers the marketplace will be full of brokers all competing to corner the market. They will offer lots of incentives to stay competitive. These usually include a demo account to allow new traders to trade on the platform without depositing any of their own funds. With a demo account the broker usually offers a time frame in which to take advantage of the demo platform before the option is no longer available.
Is it easy to make deposits and withdrawals?
Making deposits and withdrawals is easy. Simply open an account and make your deposit. Once you have funds to withdraw you will need to request a withdrawal. This can take up to 3-5 days, some brokers offer a much quicker turnaround for those higher stakes traders. There are the odd brokers who will offer much quicker withdrawal turnarounds. Most credit cards, wire transfer options and e-wallets are accepted.
Can I trade using my mobile or tablet device?
If a broker doesn't offer the option or functionality to trade on a mobile phone or tablet then are they really the broker for you? Like most people you probably do most things on the go, binary options trading is no exception. To stay competitive all brokers must have either a responsive, easy to use version of their website available for mobile or an app available for either Android or iOS.