A popular and well established broker in the binary options industry ceased to exist. BeeOptions has announced officially that it is closing down. The broker used SpotOption, which, apart from becoming the gold standard for industry trading platforms, decided to halt US based IP address trading on their platform, regardless of which broker used it. SpotOption will now focus its efforts on the European markets, and precisely this pivot to the Eastern side of the Atlantic, might be to blame for BeeOption’s sudden downfall.
Presumably, BeeOptions had a significant enough amount of traffic coming from the US. Since SpotOption does not allow US investors on their platform anymore, BeeOptions might have had trouble reacting to this change. Logically speaking, the broker could have switched to other, less widely used platforms in order to overcome the US client issue. Continuing on the same line of thought, the next logical assumption that can be made is that BeeOptions could have been counting on a robust enough European counting base that would pull it through the pivot. If this was the case, then the broker could have overestimated its capacity to rely on its European client base, thus failing to change its platform which allegedly contributed to their downfall.
An Industry Dominated by Competition
It is no secret to any industry enthusiast that there is fierce competition for the binary option customer base among the brokers. If your customers are already comfortable with your platform, changing it might spook them away, especially if other brokers can offer incentives for them to trade through the same platform you have decided to change. Loyal long term traders are potentially the most likely to switch broker if you change the platform. But if you adopt a sound strategy to introduce changes and if you widen your client base enough, you should be able to survive and thrive in the industry.
Investors like Brokers
If indeed BeeOptions closed down because its platform would no longer support US customers and they didn’t hedge in Europe, it would serve to teach the whole investment community a lesson. Just like investors should know that trading in binary options is sensitive to sudden market changes, brokers, and for that matter platform developers should take a cue from their clients and hedge properly.
All the actors involved in binary options trading, whether they are brokers, software developers, investors and even regulators, are navigating in an increasingly complex world. Technology advances on a minute by minute basis and markets shift aggressively. Even though the basis for this article is the assumption that BeeOptions closed down because their software provider decided to pivot away from the US market, there is still an important lesson to be learned from this intellectual exercise. That lesson is simple: no matter what is your stake in the industry, keep the building blocks of finance in your minds and learn how to hedge properly.