Hong Kongese Traders Guide
Numerous binary options brokers are eager to break into the Hong Kong market, but not all are to be trusted.
Hong Kong is home to twice as many skyscrapers as New York and it is amongst these that seventy world banks are headquartered, making Hong Kong one of the top five financial centres of the world. Therefore, no surprise that trading in binary options has shown such a rapid increase in Hong Kong over the last few years. It also helps that this form of trading remains unregulated and untaxed in Hong Kong, making it an even more tempting opportunity.
In this article, you will learn:
- All about how licensing works in Hong Kong
- How to choose a reputable broker to trade with
- Various ways to try binary trading for free
Traders in Hong Kong
Hong Kong citizens are blessed to live in one of the world’s most financially-lenient locations. While this means that they enjoy high incomes and low taxes, it also means that they are targets for predatory investment companies and are potentially vulnerable to scam operations. Some forms of trading are overseen by the SFC (Securities and Futures Commission), but binary options are not. Making it doubly important for you to select the best possible broker you can find.
Customer service may be the last thing on your mind when you are selecting a broker, but peace of mind when you are trading is all-important. A big part of that is knowing that there is customer support readily available, should you ever need it. It is worth checking if the brokers that interest you can offer instant access, either by phone or instant chat, for a substantial period of the day.
Some binary options brokers offer welcome bonuses; others do not. Although it may seem tempting to get ‘something for nothing’ it may be the case that the restrictions on that sort of free trade are not worthy of the amount on offer. Consistent good spreads and diversity of trading opportunities are often more valuable to traders over time.
Perhaps you have specific goals in mind when you enter the world of binary options, or maybe you would like to see the maximum amount of assets and opportunities so that you can vary your trading. As with most other businesses, brokers vary in terms of what they offer, so we always suggest that you check the availability and diversity of trades suits your specific needs before committing.
Choosing a Broker Wisely
Because you can elect to trade with any broker in the world that offers services to Hong Kong, in some ways, this leaves you slightly vulnerable. It means that you are more likely to be approached by dubious brokers who are not regulated, meaning that your money and security are at risk. If you receive any unsolicited contact, we strongly recommend that you do not respond. You should choose your broker, not the other way around.
Broker Fees And Tax
Although the format does vary, you will be liable for some fees applied to your binary options trading account. Some brokers operate a commission-based fee structure, while others may levy a fixed amount per trade.
Also, you may encounter charges for currency conversion, making withdrawals or for long trades. A good broker will make its fee structure entirely transparent before you are required to make a formal commitment; any broker that does not do so is probably best avoided.
Hong Kong citizens already enjoy some of the lowest personal taxations in the world. Better still, at the time of writing, binary options are not considered as an ‘income’ unless you are a professional trader and they form a part of your portfolio. As this status may change in the future, we do recommend that you keep a record of your trading transactions, which is always a good practice to follow anyway.
Hong Kongese Licencing
Since its inception in 1989, many forms of trading and financial transactions come under the umbrella of the Securities and Futures Commission (SFC). However, binary options have slipped through the net in that respect and there are no clear guidelines as to whether they constitute a method of financial investment or a form of gambling
While there is no formal licensing in place, the SFC does maintain an ‘Alert List’ of any suspect brokers that have come to its attention, as well as advice on how to avoid scams. You should be aware that the list is a long one, broken down alphabetically with many entries under each letter, but do not omit to check any broker against it before investing with them.
Although the SFC does not offer any guidance as to which are the best licensing authorities, the following list comprises the five considered to be the most stringent in the world:
You are fully entitled to trade with any broker you wish, but these authorities will offer the best level of protection to you.
Being a citizen of Hong Kong means that you can trade with any broker, anywhere in the world.
How we Recommend Brokers
Being a citizen of Hong Kong means that you can trade with any broker, anywhere in the world. In a way, this makes our job more straightforward, as we can concentrate on brokers which are the most suitable for your safety and enjoyment, rather than choosing from a restricted list applicable to your country. We have a panel of expert reviewers who look carefully at brokers and assess them on many different factors, meaning that you can make an informed choice without doing all the research.
Above all, we want your experience to be as enjoyable and stress-free as possible, and there are many ways in which we aim to achieve this. Our primary search is licensing and we generally look for brokers that operate under one of the more stringent authorities, meaning that you will have the best possible ‘back up’ in several ways. As well as checking that the broker is currently licensed, we also ensure that they have kept to regulations and have not been blacklisted or reprimanded for misdemeanours.
Our list is by no means exhaustive, but we put the website and data security high on our list of ‘must-haves’, as is a customer support service that is easy to contact, knowledgeable and able to interact with you in a way you can understand. We also know that mobile accessibility and user friendly platforms is of paramount importance to many traders, so we ensure that the broker can offer an equal and reliable service to mobile device users. Last, but not least, we look for overall fee transparency, diversity of assets to trade and the availability of self-help features such as FAQs and trial platforms.
Frequently Asked Questions
Is binary trading in Hong Kong legal and safe?
You are legally permitted to trade in binary options with an offshore broker. It is only illegal if the broker is Hong Kong-based. Trading is much safer with a broker regulated under a stringent authority, choose wisely.
Do I need to pay fees and taxes on my trading profits?
There will be broker fees to pay and these will vary, so always check before committing to a trade. Personal taxation in Hong Kong is very lenient and profit from binary options is not taxed unless trading constitutes your sole income.
Can I test brokers before trading with real money?
Almost every reliable binary options broker will give you the chance to try out trading using virtual currency. We recommend that you avoid any brokers that do not have this option, or only offer a brief trial period.
Is it easy to make deposits and withdrawals?
Most brokers offer a great selection of options in terms of depositing to your account and withdrawing profits. The most popular are credit/debit card, bank transfer and e-wallets such as PayPal and Neteller. Should you wish to use a less mainstream payment method like cryptocurrency, you may need to search a little harder.
Can I trade using my mobile or tablet device?
With such a high percentage of Hong Kong citizens reliant on mobile devices, all good brokers will provide a high-quality service. This may be a mobile-optimised website or a downloadable App. Some even have both, but If you have a preference, make sure that you check.
Shelly is proud of her current position as Head of Brand for a well-known organisation that owns several brokerages in the trading sector. She’s consulted for us since 2015 and readers can benefit from her insider knowledge of how brokers work.