IG represents a reasonable alternative for the NADEX -style, exchange-based trading of binary options for non-US traders.
This is in fact what we consider the top selling point of this operation and also the top reason why we recommend them. Why is exchange-based trading such a hot commodity these days? In order to understand that, you have to understand the differences between OTC Over the Counter -style trading and exchange-based options. Most brokers regulated by CySEC or various other European authorities, work on the single market-maker business model also known as the OTC model. In this setup, the broker acts as the only price-maker, which means that it essentially determines the price of the derivatives it offers through its own platform.
It also trades against its own customers. Through this setup, traders go up against the house in an online casino sort of arrangement, which gives birth to a fundamental conflict of interest. Brokers want their traders to lose, because whenever that happens, they win. The broker also has all the tools at its disposal to facilitate trader losses.
Prices can be manipulated, abusive limits can be set, slippage can be artificially induced, bad strategy information can be provided etc. If a trader is too successful, it can essentially bankrupt a broker. What this shows is that the single market-maker approach is simply not sustainable as a business model for fair binary option trading. It also makes it clear why EU-based traders are showing more and more interest in the exchange-based model.
How does the exchange-based model work? Unlike the above described OTC setup, exchange-based trading is a zero-sum game. Traders trade against each-other, and whenever someone wins money, another trader loses money.
The exchange is not a direct participant in the contest. Instead, it merely provides the platform and the technology to bring traders together. Price-making is performed by the traders too, through the time-honored dynamic of supply and demand. What all this shows is that there is no conflict of interest in this business model. He who is more skilled, knows more about the market dynamic and invests bolder, wins.
All this makes the draw of exchanged-based binary option trading quite obvious. These guys have been around for so long, one will find it hard to believe at first glance. The parent-company, from which IG has sprung forth, was founded way back inas a provider of options instruments aimed at speculating on the price of gold. IG feature an impressive selection of trading platforms and financial instruments, among them leveraged trading as well as binary options based on the exchange model.
The reason is that the risks as well as the potential rewards involved in leveraged trading are increased. There have been complaints about the leverage, which in some cases is apparently non-existent. Leverage is a bit of an issue with regulators too, who view it as an abusive feature, rather than an opportunity for traders.
CFD trading is another issue. Obviously, the focus here should be on binary option trading. IG are regulated and licensed by the FCA and they maintain offices in 17 countries.
IG is also a FTSE member and it is a globally recognized brand in the realm of online financial trading. IG offer their traders a wide selection of trading platforms, meant to cover every need and every possible device. They have a browser-based trading platform which requires no downloading, a selection of mobile trading apps, as well as Metatrader4 and advanced trading platforms for those who really know their technical analysis.
The web-based platform allows traders to create and edit watch-lists, to access the FX and equity CFD markets with DMA, to access Reuters news in a streaming format, and to launch various charts directly from the tracked markets. The layout is customizable, and traders have access to one-click dealing, as well as to dealing straight from the charts. A cozy selection of monitoring tools lets traders keep an eye on the action without actually having to stare at the screen all day.
Trading alerts can be set, as well as stops and limits. The watch-list feature is fully customizable, and it comes with preloaded watch-lists. The two charting packages available for this platform are the IG charts and the ProRealTime charting packages, which come packed with technical indicators and dedicated features, some of which are paid.
The Reuters newsfeed is integrated into the trading platform and Autochartist keeps an eye on the developing chart patterns, alerting traders whenever opportunities arise. The Mobile trading apps offered by IG cover every possible device out there, beginning with Android phones, iPhones, iPads and even Windows tablets.
The mobile apps are updated regularly, giving traders secure, bit SSL access to exclusive market data and analysis, as well as to pre-login live prices. The Advanced Platforms section is home to the L2 dealer and to various terminals and APIs, which can be connected to the core IG services.
The L2 dealer makes it possible for traders to drag and drop trades into order books. Charts and various news feeds can be linked to the main window too. Still, there have been some trader complaints in this regard as well, concerning mainly their MT4 platform. Most of these complaints are apparently about the all-too-frequent re-quotes. Spread Betting is at the core of the selection of financial services that IG offer. Forex, commodities, shares and indices are all supported in this regard, and no commissions are charged outside the dealing spreads.
Traders have a range of stops at their disposal to manage risk the way they see fit. It is important to understand that spread betting is a leveraged financial product, and therefore it may carry massive risks, coupled with massive potential rewards.
CFD trading provides an additional dimension to trading options up- and downward swings of the market. It too is a leveraged product, and thus it too features massive potential variance. Share dealing is about the purchasing and selling of shares. IG offer attractive commissions on this product, coupled with a number of other perks, such as the possibility to transfer shares from other providers, and the use of shareholdings as collateral for CFD trading and spread betting.
Their Digital binaries let traders tackle market direction, as well as volatility in general, with fixed odds and with all variables of the trading equation known before the actual trade is placed.
Trading options from the chart is possible with the Digital binaries too. The range of markets available for trading through the Digital s is truly impressive.
Scores of indices, commodities and currency pairs are covered, together with a special category of events, which features elections, politics and various economic indicators, like the US jobless claims and non-farm payrolls. As in the case of NADEX, the Digital options offered by IG will always settle at 0 or at Markets-wise, IG are particularly strong. Options have made more than 10, markets accessible through their various products.
Besides the above mentioned tradable asset categories, they also cover bonds, bitcoinsprints, interest rates, various industry sectors and Sunday trading. IG offer a complete education suite for their traders, including a full analysis section destined to take the pulse of the markets through a variety of tools.
The news and analysis section has a team of professionals making heads and tails of the market moves, helping out immensely with fundamental analysis. The financial outlook for has already been published and it will be updated continuously as the year progresses. The actual education section starts out with an introduction to trading in general.
This part covers trading basics, pricing, markets and risk management concepts. Spread betting, CFD trading and share dealing are all covered as well. The trading strategy section covers technical analysis, various trading strategies, and it takes a look at the advanced platforms detailed above.
A number of webinars are also on offer, delivered on a strict schedule. IGTV features video analysis, delivered by the in-house experts of the operator, twice a day, 5 days a week.
Those looking for interactive education will find the IG Academy app especially useful. The app is available for Android as well as iOS-based devices and it teaches traders everything, from the basics of trading to risk management, leverage and the development of trading plans. The app is suitable to all experience levels and it does in fact help one become a better trader. The education section is rounded out by a special Introduction Program, which allows traders to use the real money trading features of the site with reduced risk, for up to 6 weeks.
A special, premium package has also been created for those who qualify. Exactly who qualifies is something of a mystery though. Only active traders should ever consider applying for this package. At the IG website, such traders are encouraged to contact IG support to find out whether they do indeed qualify or not. The commissions and spreads charged on the various financial instruments offered by IG vary widely.
One can only aim for a rough estimate in this sense, as the actual fees are calculated separately for each operation. Forex spread betting costs start from a minimum of 0. The same goes for Forex CFDs. Forex MT4 costs start from 1. The phone number through which IG support can be contacted is or As said above, IG is a viable NADEX alternative for traders who reside outside the US.
They cover a massive range of markets and they offer a free demo account too. Nadex for US traders. Daweda Exchange in Europe. I wish IG Broker offered an Automated Trader Platform.
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