Binary options became popular largely due to the ease of trading that they offer compared to the complexity of the more widespread forex platforms. However, one area that remains challenging for the binary options industry to match with forex is the prevalence of automated trading solutions. Now this could finally change.
Finance Magnates has learned that SpotOption is developing its own range of solutions for binary options that aim to standardize the use of trading algorithms. We met with the firm’s Head of Algo Systems Development, Eliran Cohen, and he explained that the roll-out will initially come as three main consecutive offerings.
The first major related solution that the team developed is a bridge for MT4, so that brokers that offer the platform will be able to connect directly to SpotOption’s binary options price feeds. The importance of this offering is that clients that have MT4 Expert Advisors (EAs) for automatic trading on forex or CFDs will be able to seamlessly use them on binary options as well. This is very significant because it will allow a huge existing backlog of trading robots to cross over into the segment. The MT4 bridge is already tested out by some SpotOption brokers that offer both MT4 and binary options.
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There are thousands of EAs already available on the market but there are also many professional and independent developers experienced in MQL, which is the language EAs are written in. This has insured that if a trader wants to have his strategy coded into an automated program, he can do so quickly and at a reasonable and competitive price. For binary options traders, this has not been the case until now because even if a broker offered an API, the market was completely segmented and finding a programmer capable of developing trading robots was not so simple. This problem is what SpotOption’s second major offering, called Market Scanner, comes to solve.
Market Scanner is a trading robot builder that requires no programming, for use on the firm’s binary options platform. The developers assure that any trader will be able to create an automated strategy very quickly, just by linking together a series of customizable market triggers. For example, if a trader wants a robot that shorts the oil market whenever an RSI, MACD and a Stochastic Oscillator all reach certain values, he can simply add all these indicators from a large selection, pool one after the other and just store it as a single strategy. The Market Scanner is planned to launch as early as February 2016.
Looking at the prevalence of MT4 EAs it is obvious that one of the main reasons for their appeal is that they are broker-independent, so a developer can sell it to any MT4 user and the trader can be assured that it will work. Taking a similar approach, SpotOption will create its own unified algo store where traders of all its different brands can find the same robots and see their performance statistics. Traders will also be able to upload their strategies to the online marketplace and thus earn a revenue from followers of their robots. The profile of each robot will display its trading history and risk exposure so that interested users will be able to judge if it fits their appetite and drawdown tolerance. The algo store is dependent on the successful launch of Market Scanner and therefore will be released sometime after it.
Talking about the future for their trading algos, SpotOption developers envision more openness of the platform and offerings. One possible example is releasing the programming language that the binary options robots rely on so that advanced traders and third party developers will be able to create robots without the Market Scanner.