Binary Options Arbitrage

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Written By
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Written By
William Berg
William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.
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Edited By
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Edited By
Tobias Robinson
Tobias is a partner at DayTrading.com, director of a UK limited company and active trader. He has over 25 years of experience in the financial industry and contributed via CySec to the regulatory response to digital options and CFD trading in Europe. Toby’s expertise and dedication to financial education make him a trusted voice in the industry, including a BBC investigation into digital options.
Updated

Binary options arbitrage is a trading strategy that aims to capitalise on price discrepancies within different markets. It is considered a relatively low-risk technique due to its simplicity and how both positions are covered. This guide will explain what binary options arbitrage is, the pros and cons, plus how to get started. We’ve also listed the best brokers below.

Top Binary Options Arbitrage Brokers

Click a broker for details
  1. 1
    Pocket Option
    50% Deposit Bonus

    Ratings
    2 / 5
    3.5 / 5
    2.5 / 5
    3.5 / 5
    3.3 / 5
    3.3 / 5
    3 / 5
    3.5 / 5
    4 / 5
    4.2 / 5

    $50
    $1
    MISA
    Binary Options, Currencies, Commodities, Stocks, Indices, Cryptos
    Web, MT4, MT5
    Wire Transfer, Credit Card, Bitcoin Payments, Volet, Perfect Money, Visa, Mastercard, Debit Card, WebMoney, FasaPay, Ethereum Payments, Maestro, JetonCash
    USD
  2. 2
    IQCent
    20% to 200% Deposit Bonus

    Ratings
    2.5 / 5
    3.3 / 5
    2.4 / 5
    4.3 / 5
    3.8 / 5
    2.5 / 5
    3 / 5
    2 / 5
    4.3 / 5
    4.1 / 5

    $250
    $0.01
    1:500
    IFMRRC
    Binary Options, CFDs, Forex, Indices, Commodities, Crypto
    Online Platform, TradingView
    Credit Card, Debit Card, Wire Transfer, Bitcoin Payments, Ethereum Payments, Visa, Mastercard
    USD, EUR
  3. 3
    CloseOption
    $10 Welcome Gift

    $5
    $1
    National Bank of Georgia
    Binary Options on Forex & Cryptos
    Own
    PayPal, WebMoney, Mastercard, Perfect Money, Wire Transfer, Bitcoin Payments, Ethereum Payments
    USD
  4. 4
    Videforex
    20% to 200% Deposit Bonus

    $250
    $0.01
    1:500
    Binary Options, CFDs, Forex, Indices, Commodities, Crypto
    TradingView
    Skrill, Perfect Money, Bitcoin Payments, Neteller, Credit Card, Visa, Mastercard, Ethereum Payments
    USD, EUR, GBP, AUD, RUB
  5. 5
    Binarium

    $5
    $1
    Forex, Stocks, Cryptos
    Own
    QIWI, Yandex Money, Bitcoin Payments, Neteller, WebMoney, Wire Transfer, Visa, Mastercard, Credit Card, Debit Card
    USD, EUR, AUD, RUB
  6. 6
    RaceOption
    20% - 200% Deposit Bonus

    $250
    $0.01
    1:500
    Binary Options, CFDs
    TradingView
    Credit Card, Debit Card, Bitcoin Payments, Neteller, Skrill, Perfect Money, Mastercard, Visa, Ethereum Payments
    USD, EUR, GBP, AUD, RUB
  7. 7
    BinaryCent
    20% - 200% deposit bonus

    $250
    $0.01
    1:500
    VFSC
    CFDs, Forex, Stocks, Cryptos, Options, Commodities
    Own
    Visa, Mastercard, Debit Card, Credit Card, Skrill, WebMoney, Neteller, Bitcoin Payments, Wire Transfer, Perfect Money, Ethereum Payments
    USD
  8. 8
    World Forex
    100% Deposit Bonus

    $1
    0.01 Lots
    1:1000
    SVGFSA
    Forex, CFD Stocks, Metals, Energies, Cryptos, Digital Contracts
    MT4, MT5
    Wire Transfer, Debit Card, Credit Card, Visa, Mastercard, Google Wallet, Apple Pay, Perfect Money, Bitcoin Payments, Volet
    USD, EUR, RUB

Here is a short overview of each broker's pros and cons

  1. Pocket Option - Pocket Option offers ultra-short-term binaries from 5 seconds on one of the simplest web platforms for beginners. Payouts rival alternatives at 90%+ while the ‘Double Up’ and ‘Rollover’ features provide further opportunities to profit. Considering the negatives, the suite of 130+ assets trails binary brokers like Quotex, which offer 400+.
  2. IQCent - IQCent offers binary options with above-average payouts up to 98%. The broker supports an online platform with basic analysis tools but a wide range of timeframes, from 1 minute to 1 month, catering to short and long term trading strategies. Considering the negatives, there are no binaries on stocks.
  3. CloseOption - CloseOption offers binary options trading on 30+ fiat and digital currencies through an easy-to-use web-based platform. 15 contract timeframes are available from 30 seconds to 1 month, suiting both short-term and long-term traders. New users also get a joining gift.
  4. Videforex - Videforex continues to offer binary options with 20% payouts on crypto and up to 98% on less volatile assets, beating many competitors. A wide range of contract lengths are also supported from 5 seconds up to 1 month. New users will appreciate the welcome deposit bonus.
  5. Binarium - Binarium is an experienced binary options broker offering access to a range of financial markets with a proprietary, sleek platform. New users can claim a welcome bonus up to $1,500 or practice in the demo account with $10,000.
  6. RaceOption - RaceOption offers 100+ binaries with decent payouts up to 95% and ultra-fast expiries from 5 seconds. With a $250 minimum deposit, clients can enjoy free deposits, fast withdrawals and a range of trading bonuses.
  7. BinaryCent - BinaryCent provides binary options trading on a range of markets through a slick proprietary platform. Traders can invest as little as $0.10 per trade and earn payouts up to 95%, and these are excellent terms that accommodate casual and low-capital traders while allowing profit opportunities.
  8. World Forex - World Forex offers binary options where you simply decide the stake, price direction and contract timeframe. The payouts are high at up to 100% on American contracts and 85% on European, which also offers a partial refund to traders who close contracts before expiry.

Pocket Option

"Pocket Option excels for its easy-to-use web platform which provides a best-in-class user experience for short-term binary traders. The $50 minimum deposit is also accessible for beginners while opening an account is really easy. Looking at the negatives, Pocket Option still trails alternatives in its market offering and regulatory credentials."

Jemma Grist, Reviewer

Pocket Option Quick Facts

Bonus Offer50% Deposit Bonus
Minimum Deposit$50
Payout %92%
Expiry Times5 seconds - 4 hours
Copy TradingYes
PlatformsWeb, MT4, MT5
InstrumentsBinary Options, Currencies, Commodities, Stocks, Indices, Cryptos
Account CurrenciesUSD

Pros

  • The range of payment methods beats the majority of rivals, providing fast, secure and convenient deposits for traders in most countries
  • The MetaTrader platforms offer integrated analysis with helpful technical summaries for short-term traders
  • Well-funded traders who deposit $1000+ can qualify for a 2%+ payout boost, more tradable assets and exclusive perks

Cons

  • Pocket Option offers a slimmed down iteration of the MT4 and MT5 that doesn't provide the full charting package for advanced traders
  • You need to deposit $1000 to access the extended list of 250+ assets, otherwise just 130+ assets are available
  • The maximum binary contract length of 4 hours is restrictive for longer-term trading strategies. Alternatives like Videforex offer binaries up to 1 month

IQCent

"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "

Jemma Grist, Reviewer

IQCent Quick Facts

Bonus Offer20% to 200% Deposit Bonus
Minimum Deposit$250
Payout %98%
Expiry Times5 seconds - 1 month
Copy TradingYes
PlatformsOnline Platform, TradingView
InstrumentsBinary Options, CFDs, Forex, Indices, Commodities, Crypto
Account CurrenciesUSD, EUR

Pros

  • IQCent is one of the few binary options brokers that also offers a copy trading service for hands-off traders
  • There's an accessible $0.01 minimum stake for new day traders with a small budget
  • The broker offers up to 98% payouts on binary options, which is more than alternatives like Pocket Option, only offering up to 92%

Cons

  • IQCent charges a punitive $10 monthly inactivity fee if you fail to place at least 1 trade per month
  • The broker is not overseen by a respected regulator, though this is common among binary options firms
  • There's no automated trading support for algo traders

CloseOption

"CloseOption is a good pick for traders seeking a user-friendly binary options platform with high payouts and joining bonuses."

Tobias Robinson, Reviewer

CloseOption Quick Facts

Bonus Offer$10 Welcome Gift
Minimum Deposit$5
Payout %95%
Expiry Times30 seconds - 1 month
Copy TradingNo
PlatformsOwn
InstrumentsBinary Options on Forex & Cryptos
Account CurrenciesUSD

Pros

  • CloseOption offers weekly trading tournaments with cash prizes
  • Multiple global payment methods are available
  • Free demo account

Cons

  • Binary options are only available on fiat and digital currencies
  • Clients need to deposit $50,000+ to qualify for the best payouts
  • CloseOption is not regulated by a well-regarded trading authority

Videforex

"Newer traders will find a lot to enjoy about trading binary options on Videforex's easy-to-use proprietary platform, as well as the broker's copy trading solution. Payouts also remain higher than most alternatives climbing to 98%."

William Berg, Reviewer

Videforex Quick Facts

Bonus Offer20% to 200% Deposit Bonus
Minimum Deposit$250
Payout %98%
Expiry Times5 seconds - 1 month
Copy TradingYes
PlatformsTradingView
InstrumentsBinary Options, CFDs, Forex, Indices, Commodities, Crypto
Account CurrenciesUSD, EUR, GBP, AUD, RUB

Pros

  • You can easily mirror the trades of experienced investors with low fees
  • Global clients can make free and fast transfers via a wide range of payment types, from credit cards to cryptocurrencies
  • Videforex regularly runs trading contests, offering great practice opportunities and cash prizes to beginners and experienced traders

Cons

  • The broker isn’t overseen by a trusted regulatory agency
  • No MetaTrader 4 integration
  • US clients aren’t accepted due to legal restrictions

Binarium

"Binarium is a good binary options broker for traders looking for an experienced brand with low deposit requirements and a welcome bonus."

William Berg, Reviewer

Binarium Quick Facts

Minimum Deposit$5
Payout %80
Copy TradingNo
PlatformsOwn
InstrumentsForex, Stocks, Cryptos
Account CurrenciesUSD, EUR, AUD, RUB

Pros

  • Community forum platform
  • Flexible payment methods and account currencies, including support for crypto payments
  • Low minimum deposit requirements

Cons

  • Lower payouts than other binary options brokers
  • No industry established trading terminals
  • Limited information on broker’s website

RaceOption

"RaceOption will appeal to traders new to binary options looking for copy trading, contests and 24/7 customer support. Experienced traders will also appreciate the account-based perks and bonuses."

William Berg, Reviewer

RaceOption Quick Facts

Bonus Offer20% - 200% Deposit Bonus
Minimum Deposit$250
Payout %95%
Expiry Times5 seconds - 30 days
Copy TradingYes
PlatformsTradingView
InstrumentsBinary Options, CFDs
Account CurrenciesUSD, EUR, GBP, AUD, RUB

Pros

  • Free and instant deposits via bank cards and cryptos, plus guaranteed withdrawals processing within 1 hour
  • High payouts on popular underlying assets up to 95%
  • Flexible weekend trading available plus 24/7 multilingual customer support

Cons

  • Withdrawal thresholds apply
  • Limited educational resources
  • No free demo account

BinaryCent

"Traders who want a reliable binary options broker with a streamlined platform and high payouts should try out BinaryCent."

Tobias Robinson, Reviewer

BinaryCent Quick Facts

Bonus Offer20% - 200% deposit bonus
Minimum Deposit$250
Payout %95%
Expiry Times5 seconds - 30 days
Copy TradingYes
PlatformsOwn
InstrumentsCFDs, Forex, Stocks, Cryptos, Options, Commodities
Account CurrenciesUSD

Pros

  • Payouts up to 95% are higher than most competitors and increases profit potential
  • Trade binary contracts from $0.10 allowing trading opportunities for all budgets
  • Simple and straightforward proprietary platform for binary options trading

Cons

  • The $250 minimum deposit is higher than most binary options brokers
  • Not available to traders based in the US
  • Not overseen by any reputable regulator, raising risks and reducing customer protections

World Forex

"World Forex provides both highly leveraged CFDs and digital contracts, making this a good broker for clients who want flexible and rewarding ways to trade. The copy trading service will also appeal to newer traders."

Tobias Robinson, Reviewer

World Forex Quick Facts

Bonus Offer100% Deposit Bonus
Minimum Deposit$1
Payout %100%
Expiry Times1 minute - 7 days
Copy TradingYes
PlatformsMT4, MT5
InstrumentsForex, CFD Stocks, Metals, Energies, Cryptos, Digital Contracts
Account CurrenciesUSD, EUR, RUB

Pros

  • Swap-free account available
  • Educational content
  • MT4, MT5 and a proprietary trading terminal

Cons

  • Withdrawal fees apply
  • No negative balance protection
  • Weak regulation

What Is Binary Options Arbitrage?

Binary Options

Binary options allow you to trade based on two possible outcomes: yes or no. Traders predict the price movement of an asset, such as Tesla stock, and set an expiry time. The price at the expiry will determine whether the trader is ‘in the money’ or ‘out of the money’. Traders can choose from several styles of binary options, including high/low, touch/no-touch and boundary options.

Arbitrage

Arbitrage involves executing simultaneous trades with the aim of benefiting from an asset’s price difference on two different exchanges.

An example of this would be if a company is listed on both the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE) at prices of £5 and $8, respectively. If we assume the exchange rate of $1 = £0.74, there is a difference of £0.92 in value. To capitalise on this discrepancy, you would purchase shares on the LSE and immediately sell them on the NYSE, earning a profit of £0.92.

While this is a small amount, making regular and frequent trades with a greater volume can help to gain larger revenues. This basic example utilised stocks, however, arbitrage is a strategy you can use for many instruments including forex, cryptocurrencies, commodities and, importantly, binary options.

brokers that support binary options arbitrage

How It Works

Arbitrage with binary options involves making both a ‘call’ and a ‘put’ on the same asset. This means that upon expiration, one of your two positions will always be ‘in the money’. In order to make a net profit from this strategy, you will need to find a trade with a payout greater than 100%.

If you just make binary options trades where you earn a profit of $100, but you have invested $200 across the two positions, you will not yield any net profit. In fact, you will likely make a loss when you account for the fees. Because of this, you want to look for highly volatile assets that are more likely to have greater payouts for either option at different brokerages.

It can be difficult to find suitable opportunities for binary options arbitrage due to these specific conditions required. It is also important that when you make this trade that both positions expire at the same time, otherwise you are not completely covered. For example, if one position expires five minutes after the first, the asset’s price could fluctuate, such that neither is ‘in the money’.

Getting Started

Brokers

Unlike arbitrage with other instruments, binary options do not require you to trade on separate exchanges where you may need to consider currency exchange rates. Rather, you are looking for irregularities across different brokers. For this, you will want to find two brokers where one offers greater returns for going high while the other offers better rewards for going low.

As these discrepancies are rare and often corrected quickly, it may be helpful to have an account with a number of brokers offering binary options, such as Pocket Option and Quotex. This will allow you to quickly take advantage of the opportunity before it is remedied.

Assets

When searching for assets with binary options arbitrage, it can be difficult to find potential trading opportunities that satisfy the specific criteria. You are essentially reliant on the market operating inefficiently, which is rare. To help identify these opportunities, you will need to monitor the news for announcements that could seriously impact an asset’s value.

binary options arbitrage platforms explained

Fortunately, impactful news is publicised outside a stock exchange’s trading hours, which can lead to wild speculation over an asset’s price at market opening. Binary options do not operate on any single centralised market and so it is possible to execute trades around the clock, meaning you can take advantage of this speculation.

There are also opportunities with assets that are linked together. A prime example of this is the inverse relationship between the Japanese Yen (JPY) and the price of oil. As Japan imports a lot of oil, JPY sometimes increases following a decrease in oil price. Connections such as these offer exciting binary options arbitrage trades, however, they are riskier as you are reliant on a correlation continuing.

Pros Of Binary Options Arbitrage

Traders looking to use binary options arbitrage techniques enjoy multiple benefits:

Cons Of Binary Options Arbitrage

However, there are some notable drawbacks:

Final Word

Binary options arbitrage is a good strategy with potential for low-risk trades. Opportunities are rare, however, so you need to conduct plenty of research into how these trades work to learn what information you are seeking when identifying assets. Use our list of brokers to get started.

FAQs

Yes, the binary options arbitrage strategy is legal. It is important to note, however, that binary options trading is not permitted in some countries. Check your local jurisdiction’s rules before trading.

What Is Arbitrage?

For binary options, arbitrage means you make trades covering both positions. For example, you make trades for an asset’s price being both inside and outside a price range at a given expiration time.

What Types Of Binary Options Are Available For Arbitrage?

You can use arbitrage on all types of binary options. This includes high/low trades, range/boundary, touch/no-touch and ladder trading. As such, arbitrage can be an appealing strategy for those who wish to diversify their options trades.

Can I Make Binary Options Trades In The USA?

The Commodity Futures Trading Commission (CFTC) says that US-based retail traders may execute binary options trades but they must use regulated exchanges. Make sure to thoroughly research your chosen brokers and check for correct licensing documents.

Can I Use Bots To Identify Binary Options Arbitrage Opportunities?

Yes, algorithms are a great aid for scouring the markets for arbitrage opportunities. It can be difficult to find arbitrage opportunities as they are so uncommon and so having a robot conduct the search on your behalf can speed up the process.