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24Option is a broker that primarily provides trading in binary options. Additionally, traders have the possibility to trade CFDs as well. For this reason, you don’t need to know as much about costs as you would if you were trading currency pairs through a classic Forex broker, for example. When trading binary options, for example, there are no direct costs involved, but instead the fees are processed in a very indirect way in the achievable return. For this reason, we would like to deal with the costs in more general terms in the following guide, but of course we would also like to inform you about Broker 24 Options and the fee factors with which you must calculate there.
Spreads when trading currency pairs
Broker 24Option is not one of the providers providing trading of currency pairs. Instead, you can trade both Binary Options and CFD contracts. Basically, with classic Forex brokers, the spread is the main cost factor. Therefore, when trading forex pairs, it is common for there to be a buy price on the one hand and a sell price on the other. The difference between both prices is the spread, which is always expressed in pips. A pip in turn is a unit representing the smallest possible price change. If the currency pair, such as the euro and US dollar, is quoted to the fourth decimal place, the spread would be three pips, for example, and thus three smallest change points (fourth decimal place).
24option is also no exception. Some forex brokers charge commissions either as an alternative or in addition to the spread. In this case, a fee is usually charged, which is a percentage of the traded equivalent. Not to be forgotten, of course, are the financing costs that are always payable by the trader if, when trading in Forex, he does not close an open position by the end of the day, but instead rolls it over to the next day.
Unfortunately, you will not find any concrete information on the spreads for Forex and CFDs on the 24option homepage. To do this, you must first log in to the trading platform. Only then will you receive precise information on the current spreads.
Extract from the spreads for Forex trading at 24option
As you can see, the spreads for forex trading at 24option are not necessarily the cheapest. Forex brokers such as IG or GKFX are certainly better at this. However, since customers of 24option are more likely to be interested in trading binary options anyway, these values may be more likely to be ignored by these customers. Who wants to trade, however, also with currencies, for that it is surely sensible to compare other providers with regard to the costs for with each other.
Fees when trading CFDs
CFD trading is very similar in cost to trading currency pairs. This means that usually the spread is the main cost factor. CFD brokers operate in a similar way to trading currency pairs in that there is a buy price and a sell price. This is of course also the case with 24option.
Extract from the spreads for CFD trading with 24option
|Gold CFD||0.9 Points|
|BMW CFD||0.75 EUR|
|Google CFD||1 USD|
|Facebook CFD||1 USD|
Other costs, which can sometimes be incurred both in forex trading and CFD trading, are incurred if you do not use the account for a long period of time. In this case some brokers, including 24Option, charge an inactivity fee.
However, hardly any brokers charge account management fees as such, so you can ignore this point of comparison nowadays.
Costs of trading binary options
Binary options trading is slightly different from Forex and CFD trading. There is no classic spread and no direct fees that you have to pay attention to. Instead, the income that brokers naturally have to generate in this area of trading is indirectly included in the return that the trader can achieve.
You will probably have noticed that, with the exception of the high-yield area, you cannot achieve a return above 95 percent when trading binary options. This is no different with 24option. The possible returns depend on the type of account the trader has chosen. Typically, the possible profit with 24option is between 82 and 88 percent. You can imagine this difference to 100 percent in principle as indirect fees with which the Binary Options Broker can cover his costs.
The costs of the Broker 24Option
As mentioned at the beginning, 24Option is a broker that primarily enables trading in binary options. In our general section we have already explained that in this case no direct fees or costs are charged to the trader. What you can compare in this case, however, are the returns that can be achieved with the various brokers, which in the case of 24Option depend on the account type of the trade.
With the Broker 24Option, the maximum return in the area of classic binary options is 89 percent. This puts the Broker in the upper range in direct comparison with its competitors.
So if you draw the reverse conclusion that a relatively high return also means that the indirect costs are low, the broker gives a very good picture in this valuation area. However, you must also pay attention to a direct fee with the Broker 24 option, namely the so-called inactivity costs. If you do not use the trading account provided for a period of at least three months, a monthly fee is charged, which the broker estimates for providing the account. The cost is then ten euros per month if no binary option is traded during this period.
In addition to binary options, 24Option also offers CFD trading. Here, the classic cost factors, namely the estimated spreads, are what you can look at and compare with the costs of other brokers. Among other things, the broker also offers trading in currency CFDs, so that you can calculate with a spread of three pips, for example, with a CFD on the currency pair Euro / US dollar. There are also financing costs in this area if you have a CFD position carried over to the next day.
Another cost factor that you will find with many online brokers is the deposit and withdrawal costs. With Broker 24Option, deposits to your trading account are free of charge with any of the payment methods you choose. This is different for withdrawals, because the type of account you have chosen is decisive. Only Platinum and Diamond accounts guarantee that all withdrawals are free of charge. For all other account types, only one withdrawal from the trading account per month is free of charge. In addition, if you choose to make a second, third or fourth withdrawal within a calendar month, fees will apply depending on the payment method. These fees can be up to 3.5 percent or 20 euros per withdrawal, so our tip is to make only one withdrawal per month from your trading account if possible.
Fees for payouts with 24option
|Bank transfer||$30, €25, 20 GBP or 3.000 JPY|
Conclusion on the costs of the Broker 24 option
In principle, the costs are very transparent with Broker 24Option, because when trading binary options, they are virtually incorporated into the return achievable by the trader. If you want to make a comparison with other providers in this respect, you basically only need to compare the level of the achievable return. When trading CFDs, the broker indicates on his website the average costs in the form of the spread that you can calculate with. However, we lack precise information about the usual costs of CFD trading such as spreads or financing fees for the individual currency pairs or CFDs. Here you have to log in to the trading platform first to see the respective spreads live while trading. We also find it a little unpleasant that only two account types (platinum and diamond) are completely free of charge, while all other account types are subject to the fees we have mentioned from the second payout per month.