Binary Options Terms & Conditions: Why You Should Read Them

Binary options trading Terms and Conditions (T & C) are like the instructional manual for a machine or a vehicle. It details how trading is to be performed on a binary options platform, the dos and don’ts of the trading platform, what responsibilities the broker has to the trader and what responsibilities the trader owes the broker in conducting trading business. The very sad reality is that if you ask 100 binary options traders whether they have ever read the T & Cs on their broker platforms, you would be hard-pressed finding two that have done so. Little wonder many of them have issues down the road and are forced to do what they ought to have done first: read and get interpretation of the binary options trading terms and conditions issued by their brokers.

Why Trading Terms & Conditions?

The binary options trading terms and conditions document is simply the broker telling you how things work on their own side and what to expect as a trader who has signed up to trade binary options with them. The Terms and Conditions document details the terms under which the client uses the binary options company’s website, trading portal, software, applications and services.

What is Covered in a Binary Trading Terms and Conditions Document?

The following items are covered in a T & C document.

  • Use of the Binary Options Broker’s Website

This usually notifies the trader about the legality of accessing the contents of the broker’s website. Binary options is not for people under the age of 18 years, so by law in many countries, accessing a binary options website is only legally allowed for those 18 years and above.

The broker may decide to change some of the content on the website without giving prior notice to the trader. Therefore, clients are to be aware of this and make sure they periodically read the website’s contents for any changes.

  • Website Access

Some countries prohibit the accessing of binary options websites. In addition, traders are warned about illegal access to sections of the broker’s website through hacking, as well as cloning broker websites for nefarious purposes.

  • Disclaimer of Warranties

Binary options brokers tend to warn traders that there are no guarantees to the results showcased on the broker websites. This has a bearing on items such as results of social traders or traders who have participated and won in trading competitions. Disclaimers are usually provided in this regard.

4) Privacy

Anytime a trader opens and account and submits verification documents to a binary options broker, that trader has provided sensitive personal data which is protected by law from unauthorised sharing with third parties. There have been cases where such data have been compromised and sold. Brokers are mandated to inform traders how their data, collected on account opening, is protected. Traders should also know their rights in case such data is compromised.

5) Limitation of Liability

Traders can suffer losses within and outside the circle of core trading. Brokers usually indemnify themselves of such losses by outing up a limitation of liability statement. Traders need to be aware of this so that they know ahead of time, where the broker’s liability starts and ends. Many traders ignore this until a situation arises when someone is to be held accountable, either in court or before regulators. What can you hold your broker accountable for? Read this section to find out before you make that deposit.

6) Intellectual Property

Binary options companies operate their business as brands, with intellectual property rights. Infringing on those rights could carry consequences. Know what is covered under the intellectual property protections for brokers. This is especially important for affiliates and content marketers.

7) Links and Advertisements

Occasionally, brokers may link to other non-affiliated websites to feature ads, promotions, or provide information. To what extent is the broker responsible for such material? This section explains it all.

8) Client Agreement

There is usually an agreement which has to be signed by the trader and the broker. It is legally binding and accepting the terms and conditions is interpreted as consenting to the terms of the client agreements.

The client agreement is probably the most important part of the T & C document and contains the following sections:

a) Introduction of all parties to the agreement.

b) Interpretation of the nature of binary options as a market.

c) Legal age requirements

d) Rules regarding account opening and provision of accompanying documentation.

e) Conditions under which trading is permitted or not allowed. Also, conditions where trading could be suspended.

f) Conditions surrounding the operation of the payment systems, deposits and withdrawal of funds by the trader.

g) An explanation of the trading platform, pricing and payouts.

h) Rules regarding the use of manual and automated trading software.

g) Reporting of trading activity and the format this will assume.

This is usually an extensive section and requires careful study by the trader. Many things that will impact the trader further down the road can easily be missed.

9) Funds

Specific rules regarding funds are also displayed in the T & C. These include:

a) How funds are sent and received from trader to broker and vice versa.

b) Rules regarding disclosures of source of funds.

c) Limits of funding and withdrawal, as well as any charges that may accrue.

10) Bonus Policy

This is probably the most controversial aspect of binary options trading. Brokers that award bonuses usually stipulate the terms under which bonuses are to be used. A common requirement is the use of volume targets to permit the withdrawal of bonuses. Many traders have found themselves caught out. Some brokers have also been accused by regulators of using this tool exploitatively on traders, leading to a prohibition on their issuance by CySEC (Cyprus), ASIC (Australia) and the FFAJ (Japan).

11) Privacy and Data Protection

Binary options companies are required to state how they handle all data collected from their clients, and the measures used in ensuring their sanctity.

12)  Advisory Service and Tax Information

Binary options brokers would usually state if they provide investment advice, if there is conflict of interest and if they withhold tax on profits made by the trader.

13) Account Closure Procedures

The binary options trading Terms and Conditions document is to state clearly what procedures are followed when a trader expresses the desire to close the trading account.

14) General Provisions

A few general provisions are also included. These cover amendments to the agreement, conditions and circumstances which could void the agreements, issues pertaining to joint trading accounts, dormancy of accounts and claiming of funds by a next of kin on demise of an active trader.

This is not an exhaustive list of items. A visit to the T & C page of any binary options broker will detail what is covered in this document.


In most cases, traders open trading accounts with brokers that are located in countries that are far away and not very accessible. Any time money is transferred to an entity abroad, a certain level of risk is being assumed by the trader. It is very important to understand under what conditions you will be trading binary options with a broker. Not a few traders have encountered nasty surprises along the way, either from misunderstanding certain aspects of the T & C document, or not reading such a document at all.

Traders should as much as possible, consult with lawyers or with professionals well versed in these matters before committing their hard-earned funds for trading.