Ever since I published my Nadex review, many non-US traders (who cannot sign up with Nadex) approached me and asked if there is a Nadex-alternative they can use. My review today will focus on one such alternative, Digital 100s by IG, the world’s no. 1 CFD provider and a leader in spread betting across more than 201 countries, which is associated with Nadex.
Digital 100s by IG.com 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 trading.
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. It’s obvious that the latter will not let that happen. 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. For those services, it charges certain fees/spreads. 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. The “house” doesn’t take any losses, therefore it’s not in its interest to stop the winner from becoming “too successful.” All this makes the draw of exchanged-based binary option trading quite obvious.
IG.com is the self-proclaimed “world’s #1 spread betting and CFD provider” and that may indeed well be true. 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 in 1974, as a provider of financial instruments aimed at speculating on the price of gold. The online component of the operation has been launched in 1998, and it has since grown into the UK’s top retail Forex and Contracts for Difference provider. 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. IG’s binary options platform is called Digital 100s.
Leveraged trading is indeed one of their most-advertised products, but on our end, we only recommend it to experienced traders who do indeed know what they’re doing. The reason is that the risks as well as the potential rewards involved in leveraged trading are increased. The other problem is that the public feedback concerning this side of the operation isn’t exactly stellar. 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. In some of the reports posted by the FCA, it’s been made clear that 82% of CFD customers have lost money. Obviously, the focus here should be on binary option trading, namely on Digital 100s.
IG are regulated and licensed by the FCA and they maintain offices in 17 countries. They keep their traders’ funds in specially set-up segregated accounts, and they always have enough money on hand to offer their traders proper and legally required bankruptcy protection. IG is also a FTSE 250 member and it is a globally recognized brand in the realm of online financial trading.
IG Trading Platforms
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, 256-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.
It’s obvious that platform-wise, IGs game is extremely strong indeed. 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.
IG Services/Trade Types
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 the 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.
IG’s Binary product is what we recommend over the above detailed trade types, for obvious reasons. Their Digital 100 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. The Digital 100s cover Up/Down, One Touch, Target, High/Low, Tunnel and Ladder options, giving traders the opportunity to put a wide range of strategies to use. Trading directly from the chart is possible with the Digital 100 binaries too.
The range of markets available for trading through the Digital 100s 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 100 options offered by IG will always settle at 0 or at 100.
Markets-wise, IG are particularly strong. They have made more than 10,000 markets accessible through their various products. Besides the above mentioned tradable asset categories, they also cover bonds, bitcoin, sprints, 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. There’s an economic calendar included here too, as well as a weekly look-ahead segment. The financial outlook for 2017 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. There’s a special chapter dedicated to explaining how the numerous IG platforms work, and how one can trade through them. 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. This way, one can ease into the flow of trading action, without crashing and burning his/her initial balance.
IG Account Types
Besides the above described reduced-risk introductory account, IG features a regular “Trader” account, aimed at those who are experienced or who trade professionally. There’s also an execution-only stock-broking account offered to those only interested in trading the equity market. 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.
IG Commissions and Spreads
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 0.8 pips. The same goes for Forex CFDs. Forex MT4 costs start from 1.2 pips, while the Forex DMA costs average around 1.8 pips, plus the minimum commission (which is usually $10).
The experienced IG support crew can be reached 24/5 through live chat. There’s an email address available as well: firstname.lastname@example.org, and traders can use an intricate contact form to ask for assistance. The phone number through which IG support can be contacted is 0800 409 6789 or 0207 896 0079.
IG’s Digital 100s Review Conclusion
As said above, IG’s Digital 100s is a viable Nadex alternative for traders who reside outside the US. In the “plus” column, they have a dedicated and experienced support staff, a massive selection of advanced trading tools, an exhaustive education section and quite a bouquet of trading platforms. They cover a massive range of markets and they offer a free demo account too. On the downside: their website is a clutter of poorly organized but plentiful information, and there are trader complaints in regards to several of the services they offer.
|Trading platform||Proprietary, MT4, advanced platforms|
|Support||email, live chat, phone.|
|Trader Demographics||Everyone, everywhere, except US and Canada|
|App compatibility||Windows, Android, iOS|
|Customer service||Eager to assist, available 24/7.|
|Demo Account||Yes – free|
To use IG.com as a Forex broker, please click here.
To sign up with IG’s binary options product, Digital 100s, you may use the following link:
Signals for use with IG’s Digital 100s
As an IG client you will have access to a wide range of trading tools, including fully automated trading and signals. You will be able to learn how to trade on your own using the available tools or use the signals and algorithmic auto trading provided by IG. As some of you know, I do not usually recommend using software designed by brokers or accepting trading advice from brokers. However, this doesn’t apply to trading on an exchange, such as Daweda Exchange or IG, where the broker doesn’t benefit from your losses. Anyway, you will also be able to use the signals provided by the professional traders in Mike’s manual signals group on Facebook with your IG account.
For those of you who are looking for real trading instead of magically making millions overnight on 100% autopilot, IG seems to be the best way to go, especially when used with a highly profitable signal service, such as Mike’s trading signals. If you are looking for a broker, I highly recommend to ONLY choose a broker that is regulated in your country. If there is no local regulation in your country for binary options, go with EU-regulated brokers, with IG being one of the best, most trustworthy options. If you decide to sign up with IG and would like to be invited to Mike’s signals group for FREE, please let me know.
Feel free to contact me with any questions and comments at ObjectiveBO@gmail.com or via Facebook.