The first Japanese FX broker that got regulated in the UK and started operating in that market, Hirose Financial UK, has laid foot on the ground a couple of years ago by launching its FCA regulated brokerage Hirose FX. Now it is about to shake up the binary options industry in the UK, by introducing its proprietary binary options platform under the name LION Binary Options.
The entity is regulated by the UK Gambling Commission and will use Hirose’s proprietary platform to offer its binary options solution.
The instruments that are offered on the platform are quite limited when compared to most players. Only four major currency pairs – EUR/USD, GBP/USD, USD/JPY and AUD/USD will be offered for trading between 23:25 GMT and 15:25 GMT on the following day. Hirose Financial UK representatives have confirmed to Forex Magnates reporters that the company plans to increase the hours traded and the number of offerings in the near future.
Apparently the company is aiming to attract some volumes from existing customers and try and market the relatively high payout to traders that would be content with the trading hours mentioned above.
We could only guess as to why the trading hours are limited – our best estimation is that since Hirose UK is just launching its UK offering, the company needs to synchronise the order flow that it is getting from its Japanese operations therefore aggregating the total number of bets and managing risk more efficiently.
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In order to supply sufficient liquidity and manage well its exposure to market risks, the company’s platform needs to aggregate a sufficient amount of trades. The firm is unlikely to achieve a saturated enough market with its brand new client base from European operations, hence the order aggregation.
While existing binary options traders would be happy with the high payouts (up to 90%), they might be certainly disappointed with the relatively tight trading hours for Europe. According to Hirose, the company is planning to cater to its Asian partners to increase its binary options exposure.
One more positive for the prospective clients of this binary options brokerage that can be marketed is the ability to close your position at pretty much any time – thanks to heavy regulatory requirements in Japan, the company is applying its best experience to bring a transparent trading solution to its clients.
Unlike most unregulated entities, the Japanese one will come under close regulatory scrutiny under the UK Gambling Commission, which is the price to pay in order to avoid seeing your binary options brokerage name outside of the regulatory warning notices. That said we do find it relatively unlikely that Hirose UK will come under any regulatory scrutiny – domestic binary options regulations in Japan are close to draconian, so the model that the company uses should be close to perfection – meaning that paying fair is a must for the system to run.
Who knows – if there are enough customers happy with the limited trading hours, this bet that the company is doing with its UK subsidiary might actually pay off. The main challenge remains related to marketing the product. Not many clients of binary options services are aware that Hirose is one of the biggest FX brokerages in Japan (which means in the world) with an average of more than $100 billon per month traded. On the other hand a great deal of them is quite aware that trading only four pairs and at rather odd hours for UK customers seems unattractive – how will Hirose UK play this to its favour?