ForexNewNow – SaxoBank and GFT Forex are two of the largest forex brokers on the market. However, besides forex and CFD trading, these two companies also offer binary options trading. The binary options services offered by the two ventures are somewhat different than the ones that are being offered by traditional binary options brokers.
Not only are the binary options trading services offered by the two companies different from the services offered by traditional brokers but they are also different from each other. Read the below review in order to lean about the differences between the GFT binary options platform and the SaxoBank touch binary options services.
Types of Binary Options Offered
SaxoBank offers a large selection of forex options to their clients. These options differ from traditional options on the fact that they most commonly offer much longer expiry times than the options offered by classic binary options brokers.
SaxoBank employs the touch options binary trading type. This type of options trading will require traders to predict if an underlying asset will reach a previously established value called the strike during a certain time frame. Traders may naturally also bet on the outcome that the underlying asset’s value will not reach the strike by the time of the expiry.
GFT, on the other hand, offers traditional high/low options that allow traders to trade using various assets such as commodities, indices and forex currency pairs. The services offered by GFT resemble more the options offered by traditional binary options brokers.
Calculation of Payouts
Possibly the biggest difference between the two brokers is the way they calculate payouts. When calculating payouts, SaxoBank uses a premium percentage model. Payouts will be calculated based on the percentage of the premium, which will be subtracted form the promised payout of an option.
Imagine the following example:
– An option promises a payout of $1,000
– The premium percentage is 20%
In order to purchase the option, traders will have to pay the premium price that will be 20% of the payout, which in this case is $200. In case traders will accurately predict their option, then they will receive the $1,000, meaning that they made $800 profits. If, however, the prediction will be inaccurate, then traders will lose the $200 premium.
It’s a bit more complicated in the case of GFT. Here, options have a value between 0 and 100. Traders will be paid out based on the value of their option. Consider the following example to better understand this:
– An option has a buy value of 40 and a sell value of 60.
– Traders are allowed to invest $10 per value point.
Now let’s assume that the trader invested in “buy”, and his prediction turned out to be accurate. In this case the payout will be 100 minus the “buy” value multiplied by the investment required per value point. Concretely, the payout will be (100 – 40) x 10, which is 600, or $600.
If, however the prediction will turn out to be inaccurate, then the loss will be zero minus the “buy” value multiplied by the investment required per value point. Concretely, this would be (0-40) x 10, which is -400, or a loss of $400.
Platform and Software
Both companies offer a stable and elegant online trading platform. The SaxoBank platform might be more advanced in the sense that it includes a lot of advanced features that were specially designed for expert online traders. However, this might come as a disadvantage to newcomers.
The GFT platform is perhaps a bit more elegant than the SaxoBank platform when it comes to visual elements and graphics. It also appears that the GFT puts a lot more focus on the specifics of binary trading itself, while the SaxoBank platform resembles a traditional (but advanced) forex trading platform.
SaxoBank is a major financial service provider that’s in the business for more than 20 years. The company was also the first financial service providers that decided to offer their services on the internet as well. At this moment, the company offers a large portfolio of forex trading, CFD trading and stocks trading services. This was recently supplemented by binary options as well.
Most of the services offered by the company are more advanced than the services offered by traditional forex brokers and binary options brokers. For this reason, SaxoBank is a primary service provider for highly experienced traders and institutional clients.
Like SaxoBank, GFT is also one of the largest financial service providers on the market. The company was launched in 1997 and since then it established its operations in more than 120 countries. The company offers a large forex, CFD and stocks trading portfolio that can be accessed by both institutional and retail clients. GFT offers its online trading services on a number of advanced platforms such as the Dealbook 360, Dealbook Web and Dealbook Mobile.