We are always being asked questions about price spreads so we though it would be a good idea to put up a little article to answer this very common question in one place. Let’s begin by stating that as far as binary options go, today at least, price spreads are not an issue. They are completely irrelevant to binary traders.
Nowadays when you trade binary options the price you are getting on an asset is very close if not identical to the price you will find on the charting platforms that you use for monitoring. If you are getting a price that is a few pips off the one listed by your charting platform this is because of a minor discrepancy between the timing of the two data streams. If you look closely you’ll notice that the difference is negligible, it does not arise from your binary option broker charging you slightly more for the asset you are trying to purchase an option on. This is because you are not purchasing at the price listed but rather predicting where it will be 60 seconds, 5 minutes, an hour from now.
A simple was to prove this is to explain that because you are not purchasing the asset in question but rather speculating on its movement, any difference in price will not affect your trade because it should be constant throughout the fluctuation of the asset’s price over the duration of your trade. In other words you will still enter at a certain price, and the option will still expire at a certain price, regardless of whether the price you got in at was a few pips off from what the charting platform displayed at the time. And the movement will be consistent and completely mirror that of any charting platform you compare it to.
This did used to be an issue in the industry, with some brokers tweaking their price spreads to the disadvantage of the trader but this practice has all but died out today. All the top binary options brokers we recommend here feature a consistent price and time spread, so you need not worry about getting raw deal. We regard brokers who vary their price spreads or fiddle with entry times and trade expirations as not reputable, they are not offering legitimate financial instruments but rather stacking the odds against you by messing with the parameters of your trade. The brokers we recommend on this site are all constant in the ways they price their assets and time their expirations.
So take it from us. Price spreads are not an issue. And if you trade with one of our recommended brokers you can rest assured that you are getting what you pay for and not being subtly steered towards out-of-the-money expirations.