South Africa has become an emerging market economy, and it is often considered to host some of the most progressive financial activities in the market. Several new opportunities are blooming on the surface to earn from binary options. Such a phenomenon has indeed been enhanced by the acceptance of the trade by South Africa’s financial regulator.
The Financial Services Board (FSB) regulates all financial market activities in South Africa. It is also the only non-banking financial regulator in the country that is authorized to approve binary trading. Companies that offer such trading in South Africa have to acquire a Financial Service Provider license as binary options in the country are known as Over-The-Counter (OTC) derivative instruments.
Let us dive into the step-by-step guide to binary options trading in South Africa and discuss the absolute necessities of the trade.
A step-by-step guide to trade binary options in South Africa
To understand how binary options, work in South Africa, it is important to go through a step-by-step guide of the same.
What you will read in this Post
#1 Pick an available binary options broker in South Africa
The two possible outcomes of trading Binary Options are determined by the fall or rise of the price of your underlying asset. Since this has a fixed payout and an expiry time, many tend to think that trading in binary options is much easier than in other financial markets. However, FSB in South Africa does not allow the regulation of any Binary Options Brokers in the country. Although this does forbid some local South African companies from providing binary options trading, it does not prohibit residents of the country from participating in the trade.
Here are some of the best binary options brokers in South Africa.
100+ Markets
- Accepts international clients
- Min. deposit $10
- $10,000 demo
- Professional platform
- High profit up to 95% (in case of a correct prediction)
- Fast withdrawals
100+ Markets
- Accepts international clients
- High payouts
- Professional platform
- Fast deposits/withdrawals
- Free demo account
250+ Markets
- Crypto options
- Multiple payment methods
- High profit up to 88%+
- User-friendly interface
- Personal support
- Fast registration
100+ Markets
- Accepts international clients
- Min. deposit $10
- $10,000 demo
- Professional platform
- High profit up to 95% (in case of a correct prediction)
- Fast withdrawals
from $10
(Risk warning: Trading is risky)
100+ Markets
- Accepts international clients
- High payouts
- Professional platform
- Fast deposits/withdrawals
- Free demo account
from $50
(Risk warning: Trading is risky)
250+ Markets
- Crypto options
- Multiple payment methods
- High profit up to 88%+
- User-friendly interface
- Personal support
- Fast registration
from $ 10
(Risk warning: Your capital can be at risk)
Quotex
With a customer rating of 4.08 stars, traders and investors are greatly satisfied with the services and features of Quotex. It has successfully impressed many investors over a short period of time.
Quotex has a user-friendly interface, and traders can use it from platforms like mobile phones and computers. Additional features include 9 customizable indicators and 15 drawing tools. It also uses separate tools to reveal your prices after every bet. With Quotex, you can enjoy fast withdrawals and deposits without any additional fees as well.
(Risk Warning: Your capital can be at risk.)
Pocket option
Pocket Option is a renowned binary options trading platform to perform online binary trading. It was started by a group of IT and FinTech experts, and they have successfully initiated over 10 million registered users. They also offer a $10,000 demo account.
The platform provides high payouts that can go up to 218% at times. This is significantly higher than most other binary options platforms in the market. Some important features are flexible trading options, diverse instruments, and effortless deposit and withdrawal systems.
(Risk Warning: Your capital can be at risk.)
Focus option
Focus option offers over 60+ instruments, and you can enjoy payouts of up to 90%. It also offers access to forex, commodities, indices, cryptocurrencies, and stock markets. This binary trading options broker platform was established in 2021 and has been known for its reliable services ever since.
Since this is a relatively new trading platform, it is best to proceed with caution. You can use this on a web platform, download a mobile app, and use four accounts altogether. The platform also provides great high-low options to help the trader make easier and more accurate predictions.
(Risk Warning: Your capital can be at risk.)
#2 Sign up for a trading account
Once you have chosen a satisfactory broker from the country, it is time to create your account for binary options trading. Creating an account is easy with most broker websites since they only require a few personal details of the trader. These include the first and last name of the account holder, date of birth, e-mail id, etc.
Many fake binary options websites take advantage of this information and start practicing fraudulent activities. However, authentic and recommended binary options trading websites take necessary security measures to prevent the breach of any personal information.
(Risk Warning: Your capital can be at risk.)
#3 Use a demo or live account
The third step essentially involves choosing the type of account you want for binary trading. There are majorly two types of binary options trading accounts – a demo account and a live account.
Although most platforms offer both these accounts, beginners or amateur traders should always start with a demo account. Binary Options Demo accounts involve no real money, and you will have to trade in virtual money. Since they involve no financial risks, these accounts are best for improving your skills in online binary trading. Live accounts, on the other hand, involve real money. It is majorly suggested for professional investors as profits and losses affect your money from your pocket.
#4 Pick an asset to trade
Assets are majorly divided into four categories, forex, commodities, stocks, and indices. Currency pairs or forex include EUR/USD, GBP/USD, USD/JPY, or CHF/USD. Commodities like trading gold, oil, copper, wheat, and sugar are some exciting options for binary trading. Major stock exchanges include stocks like Google, Apple, IBM, BMW, and Netflix. Stick indices in South Africa include Nasdaq and S&P 500, and domestic indices like NIKKEI (Japan) and DAX (Germany) are also available.
(Risk Warning: Your capital can be at risk.)
#5 Make an analysis
The analysis of various binary trading options and their outcomes widely depend upon several technical indicators. These can be implemented in charts and further used for analyzing market movements. Experienced traders study these technical indicators to identify patterns and trends in the market and make positive trading decisions.
Technical categories are of 3 categories,
- Trend – These indicators indicate price movements. They are also referred to as oscillators sometimes.
- Momentum – Momentum signals are utilized to determine how strong a pattern is. They also indicate reversal moments in your trade.
- Volatility – Volatility indicators measure the degree to which market changes cause price swings.
#6 Place the trade
Now you have to decide your stake and place a bet. The minimum and maximum limits depend on the broker of your choice. After you fix your bet, you can also assume your potential profit or “win.” You will also have to assess if your bet will go up or down.
If the price of an underlying asset goes up, choose the call option. This means you assumed that the prices after your designated timeframe would be higher than when you purchased it. Conversely, if the price of the asset goes down, you can subsequently choose a put action.
#7 Wait for the result
Once the timeframe of your bet has expired, the final price will be revealed. You can finally see if your prediction was right or wrong.
(Risk Warning: Your capital can be at risk.)
What is a binary option?
A binary Option can also be referred to as a financial product. The parties involved in the transaction of this product are given two outcomes depending on the expiry of the money.
As the name suggests, trade depends on the outcome of a “yes or no” proposition. Traders may receive a payout if the option expires within the money, and they suffer a loss If it expires out of the money.
Is binary trading legal in South Africa?
Currently, Binary Options Trading is legal in South Africa. There are no ongoing or current regulations that are out of order regarding this trade. In South Africa, there are no particular laws that mention this practice being illegal as well. In fact, there are no laws about online investment in the country.
To perform online binary trading, all you need to do is register with a credible binary options broker, deposit some money and withdraw any amount that you might have won.
(Risk Warning: Your capital can be at risk.)
Payment method for traders in South Africa
You can use several payment methods for trading binary options in South Africa. However, it is important to note that whatever method you choose for depositing money into the offshore account, you will receive payments in the same way as well.
How to make deposits and withdrawals?
South Africa boasts an efficient, financially technological industry that can accommodate traders with various means of transactions on binary platforms. Some deposit/withdrawal methods available in South Africa are,
- Cards – You can use a MasterCard or a VISA card to pay from binary trading in South Africa. Although deposits are processed instantly, it generally takes up to 24 hours to process withdrawals.
- Standard bank – This is the most preferred bank in South Africa that is used for segregating funds from binary traders. Some local brokers have developed a wire transfer system to help local traders with their deposits. Many also use the international wire transfer system to conduct business.
- Digital Wallets – Some Digital Wallets available in South Africa are Skrill, Neteller, WebMoney, and Payza.
Pros and cons of Binary Options trading in South Africa
The pros of binary trading options are
- Despite being an online trading platform that involves substantial risks, there is a very low chance of considerable loss. The real money involved in the trading is completely in your control.
- Since deposits start from a minimum amount of $5 with most brokers, you can easily manage, track, or alter the level of risk according to your preference.
- It is quite easy to understand when compared with other traditional trading options
- You receive quick and efficient results from the trade, and the payout is mostly given within minutes or hours.
The cons of binary trading options are
- If you have invested in bigger payouts, it will subsequently come with bigger risks. With inconsistent market movements, it can be quite challenging to make the correct decisions.
- Without proper informative materials and tools, you cannot perform efficient trading. Many brokers lack the means to perform advanced, high-paced, and high-risk trading.
- Just like traditional trading, failures will incur losses of up to 1000% of your first investment. However, winning trades will yield up to 70% profits of your original investment as well.
- Trading in binary options can often be more expensive with lower payouts when compared to forex positions.
- The trade might not be legal in some countries and parts of the world.
(Risk Warning: Your capital can be at risk.)
Risks of Binary Options trading in South Africa
Huge losses
Losses are a major part of any trading platform. Similarly, binary options traders can often incur huge losses. If a trade ends out of money, there is a considerable chance that the investor will suffer a 100% loss of their initial amount. This can become a serious disadvantage while making large trades. Therefore, it is always best to trade in small amounts and derive substantial profits.
Added risk
Binary Options Trades are majorly short-term trades by nature. Such trades have added risk. A prediction that has more time to fulfill itself has a higher chance of becoming more accurate.
Identity theft
Most broker platforms need the personal information of the trader for registration purposes. Such information includes many personal details like identity cards, driver’s licenses, and passport or debit card copies. If the broker is not transparent and credible, there is always a high risk of identity theft.
Conclusion
Online trading has been quite an influential tool for many potential traders in the last decade. Although it involves certain consistent binary options trading risks, binary trading options can also help you incur certain healthy profits.
The major risk is contingent on the market volatility and the choice of brokers by the traders. However, with a significant amount of educational resources, the trader can make more effective decisions and understand the underlying markets, strategies, important terms, and contract conditions. All of these will further reduce the chances of devastating losses.
Frequently Asked Questions (FAQs) about Binary Options in South Africa:
Is Binary Trading Options Legal in South Africa?
Yes, binary trading options are legal in South Africa. There are no laws about online investment in the country. Therefore, no ongoing or current regulations are out of order regarding this trade.
Which is the most trusted binary options broker in South Africa?
IQ Option is the most trusted and reliable binary options broker in South Africa.
What are the risks of binary trading options in South Africa?
Some of the risks of binary trading in South Africa include huge losses, added risks, and identity theft.
(Risk Warning: Your capital can be at risk.)
