Author: Jacob Bailey
Market Analyst
Jacob Bailey

British Traders Guide

Binary options trading in the UK has understandably become very popular in recent times.

It's easy for many to trade in the United Kingdom without restriction other than paying local taxes. For those looking to invest, it is essential to make sure your broker is safe and reliable. Get started by testing out a new platform using their demo account; many brokers offer these and other great features to get you trading.

In this article, you will learn:

  • The brokers best suited to your needs
  • What local payment methods are accepted
  • Taxes and fees that apply to UK residents

Recommended US Websites

Risk Warning / Ad Disclosure

Risk Warning: The products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. You should never risk money that you cannot afford to lose.

Ad Disclosure: Some of the links that you will find on this website are advertisements for which we do receive financial gain from referring new customers.

Traders in The UK

United Kingdom

When it comes to binary trading, many UK investors prefer to trade options with a locally based broker. If you’re in the UK, most traders would expect to see an office based in London at a familiar address among all the other financial institutions. Being a small country geographically there is a sense that nothing is too far away in the event of an issue. While there are many reliable and reputable UK brokers, there are many international brokers that also have a lot to offer. How do you choose and what do you need to consider when making your choice?

Licensing And Regulation

UK regulation is highly regarded, but there are also many other hugely reputable licensing bodies. These include CySEC (Cyprus) MiFID (EU) and ASIC (Australia). Often the best brokers originate in Europe or Australia, and there are plenty to choose.

Mobile Trading Tools

Ease of use of the platform and whether it is mobile friendly is a huge consideration. You need to make sure that the platform is compatible with your phone or tablet and that you find it easy to navigate.

Demo Account Features

The demo account is a huge benefit for both new and experienced traders. If you are new to trading it allows you to get acquainted with the functionality, the various assets and trade types and the different charts, data etc. If you are more familiar with trading, it offers you the opportunity to try new things.

Bonuses And Incentives

Like a demo account, a bonus also gives you the chance to get better at trading. Whether it's a no deposit bonus to get your first trades free or a deposit bonus to make your money go further, they will both save you money.

We have put together a list of recommended brokers based on our experience and knowledge of the UK binary options market. The tireless efforts of our experienced and skilled team will help you to make a more informed decision when it comes to choosing the right broker for you.

Todays Top Traders
Trader Broker Asset Profit

Broker Fees And Tax

Like earnings in most countries when trading binary options, the UK government officials state profits gained are subject to income tax by HMRC. The level of tax that an individual is liable for will very much depend on the earnings of the individual but will range from 20% to 50% depending on the level of annual income.

If an individual pays their salary tax through PAYE, any additional income gets declared through self-assessment. Any profit will be subject to income tax if the earnings for that individual is above £11k per annum. It is the responsibility of the individual to self-assess and declare this income for the appropriate tax year.

Trading options are not subject to any fees. The amount of profit an individual makes gets calculated and rewarded to the individual as stated in their payout terms. The individual may encounter small fees if trading in a foreign currency and may incur the weakness of one currency converted to another.

If a trader is trading through a US broker and deposits currency in dollars the withdrawal may be subject to small fees from the broker or the bank on top of any changes in the conversion rate that mean they won't earn as much as they might ordinarily.

Other fees are incurred for using a credit card that charge fees or any method of e-banking that charges a fee for deposits or withdrawals.

Expert Reviews

British Licencing

Currently, there are no specific financial regulations that apply to binary options trading in the United Kingdom. It has been expected for some time that regulation and legislation is imminent and that the United Kingdom would try and align with the rest of the European Union. A decision on this matter is expected in July 2016 however the EU referendum may have changed this, and it could be a longer wait than previously expected.

Now it would be reasonable to assume that the government will hand over regulation of brokers to the Financial Conduct Authority (FCA) but until this happens options trading is classed as gambling and comes under the control of the Gambling Commission. Once responsibility for UK binary options brokers is transferred over to the FCA one would expect to see suitability or wealth checks to ensure no miss-selling of products and a rigorous dispute resolution process amongst other legal stipulations.

These checks won't necessarily make it harder to trade, but it will offer greater protection to the trader. While this won't have an impact on those that operate from outside of the UK to UK citizens, it will increase the standards of brokers that are UK based. There may be regulations applied like those of the USA that make it illegal to solicit business from United Kingdom traders, however, at this time, it is still ok to trade without any stipulations or rules.

Binary options trading in the UK has become very popular in recent times.

Trending Pages

How we Recommend Brokers

Our recommendations apply to regulated binary options brokers across the globe in countries like Australia, South Africa, Russia and Canada to name but a few. To ensure that we provide you with the best, up to date and accurate knowledge we are regularly reviewing the market place, ensuring we are at the forefront of any developments and familiarising ourselves with all the ins and outs wherever you are in the world.

We have a team of specialists who are very experienced in investing and trading and know the more delicate details of the market. We analyse every single broker to check what they offer and how it stacks up against the competition. When we investigate a broker, we are looking for the following:

  • The licensing and regulation that they hold
  • Welcome bonuses and incentives that they offer
  • Ease of use and their mobile offering
  • Customer support and how efficient it is
  • Whether they provide a demo account
  • Contests and tournaments
  • Account types, trade types and assets available
  • Payouts offered and any fees associated with trading

We give our best UK binary options brokers a star rating for each aspect of their service so that you can see, at a glance, if that broker offers what you need. We do this research to enable us to provide you with a comprehensive overview of what is available and how relevant it is to you and your trading requirements.

Recommended US Website

Risk Warning / Ad Disclosure

Risk Warning: The products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. You should never risk money that you cannot afford to lose.

Ad Disclosure: Some of the links that you will find on this website are advertisements for which we do receive financial gain from referring new customers.

Frequently Asked Questions

FAQ

Is binary trading in the UK legal and safe?

It is indeed legal to trade binary options. If you choose a reliable broker then other than the obvious risk of losing money your money will be safe.

Do I need to pay fees and taxes on my profits?

Yes, you do need to pay taxes on profits in the United Kingdom. If you get paid through PAYE, then it is your responsibility to self-assess and declare any earnings outside of your salary.

Can I test brokers before trading with real money?

The typical answer is yes. If you are new to trading, it is advisable to opt for a broker with a demo account facility so that you can trade with virtual money while you get used to dealing.

Is it easy to make deposits and withdrawals?

Just open an account and make the required deposit. Withdrawals happen to the same method that was used to make the initial deposit. Withdrawals can take anywhere up to 5 days.

Can I trade using my mobile or tablet device?

The best brokers now have a platform that works on all types of devices including mobiles and tablets. Their mobile offering is often a specially designed app available from the App Store or Google Play.

Meet The Author
Jacob Bailey
Jacob Bailey
Market Analyst

Jacob has been an author for us since our launch in 2012. He has over forty years’ experience in the financial sector and has held a variety of positions within financial services corporations and venture capitalist organisations. Learn more.

Related Pages