UK readers searching for short-term trading often come across two very different products: fixed-time trades (binary options) offered by offshore platforms, and spread betting offered by FCA-regulated firms. They can look similar on screen, but legally and financially they are very different.
Legal status in the UK
- Binary options: banned for retail consumers by the FCA since April 2019. Firms offering them to UK retail clients are not authorised.
- Spread betting: legal and regulated, with FCA rules on leverage limits, negative balance protection and risk warnings.
How you win or lose
- Binary/fixed-time: fixed payout if right, lose the whole stake if wrong. The size of the move does not matter.
- Spread betting: profit or loss depends on how far the price moves, multiplied by your stake per point.
Costs
- Binary: built into the payout gap, for example 85% paid on wins versus 100% lost on losses.
- Spread betting: the spread plus overnight financing on positions held overnight.
Protection
FCA-regulated firms offer access to the Financial Ombudsman Service and, in some cases, the FSCS. Offshore binary platforms offer neither.
Tax
Spread betting profits are generally free of UK Capital Gains Tax under current rules, but this can change and depends on individual circumstances.
Risk
Both are high-risk. FCA-required disclosures show that most retail spread betting accounts lose money too.
Why UK readers still see binary adverts
Offshore platforms advertise globally. Some, including Pocket Option, state that they do not accept UK clients. If you want to understand how such a platform works and why its terms exclude certain countries, read our Pocket Option analysis.
How to check a firm in the UK
- Search the FCA Financial Services Register using the firm’s full legal name and firm reference number.
- Confirm that the website address on the register matches the one you are using.
- Check the FCA Warning List for clone firms that copy the names of authorised companies.
- Be cautious of firms that contact you first by phone, social media or messaging apps.
Common warning signs
Promises of guaranteed returns, pressure to deposit quickly, requests to install remote-access software and payment requests to personal accounts are all classic scam signals reported to the FCA.
What to do if you have already lost money
If you deposited with an unauthorised firm, contact your bank or card provider quickly to ask about a chargeback, report the firm to the FCA and Action Fraud, and be extremely wary of “recovery services” that promise to get your money back for an upfront fee. These are a well-known secondary scam targeting previous victims.
Questions to ask before trading anything
Before opening any trading account, UK readers should ask: is this firm on the FCA register; what exactly is the product; how much could I lose in a bad week; and would I be comfortable if that money were gone? If any answer is unclear, wait and learn more first.
The takeaway
If you are in the UK, regulated products and FCA-authorised firms are the only route with real consumer protection. Check the FCA register before opening any trading account.