Binary options provider Tradologic has announced that it has signed a partnership with brokerage operator bforex. Under terms of the deal, Tradologic will power twenty binary options broker brands for bforex. The first of the proposed twenty brands, Live Options, launched this week. For Tradologic, it’s a pretty sizeable deal if bforex does go ahead and initiate twenty separate brands. But it remains to be seen how many brands will actually be launched.
The deal is interesting on two accounts. First, it continues to follow the trend of forex brokers entering the binary options business. For many brokers it’s a natural move as it simply becomes a new product that they can market to their existing client base and leverage their existing sales and marketing teams. Second, the sheer number of proposed brands sheds light on how broker operators are viewing binary options.
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With many forex broker founders having their roots from the gaming industry, many have tried to replicate their online gambling success in forex. This meant utilizing a strategy that revolved around aggressive marketing and affiliate deals. In addition, launching multiple brands that would be marketed to different regions and client types, while utilizing the same sales and support infrastructure. However, while this strategy works for the gaming industry through white labeling similar software systems, within forex it is tougher. For one, forex is a financial product, and building a brand means creating trust in the market. As a result, company longevity and regulation is an important factor. (These points exist in gaming as well, but to a lesser extent) Therefore, there is value in focusing on building one broker rather than marketing multiple brands.
With binary options entering the arena in the last two years, it has opened the door again to launch a similar business to that of the gaming industry. Also, with gaming ads restricted on Google Adwords, binary options offers a ‘backdoor’ method for luring similar type customers. For this reason, many binary options platform providers initially referred to themselves as financial betting firms.
As a result, there are two streams of business models taking place. On one side are operators such as 24Option, AnyOption, and Banc de Binary, that are aiming to build up their business using the traditional brokerage model and focusing on establishing one main brand. On the other hand, the Tradologic/bforex deal represents the other side of the coin which more closely resembles the online gaming world. For vendors supporting the industry, this means catering products to fit the needs of each type of operator.