Skip to main content

Deriv Review 2024: Is Deriv Legit? Pros and Cons

Neha Gupta, CFA| Updated: February 8, 2024

If you have wondered whether the broker Deriv is legit or a scam, we’ve got your answer. We put Deriv under the microscope, and this is our honest Deriv review.

Although Deriv seems to be a legitimate broker that has been in the business for many years and earned strong customer ratings, the broker is only regulated by low-tier financial authorities. You can use Deriv to trade forex, stocks, cryptocurrencies, commodities, indices, and ETFs. However, these are only offered as CFDs and binary options, so you don’t actually own the assets but only get exposure to the markets.

While Deriv is a broker subject to regulatory oversight, we do not recommend the broker at this time for the reasons that any top-tier regulator does not regulate the broker, only offers CFDs and binary options, and its trading fees are not very transparent since they are based on floating spreads.

That is our Deriv review in a nutshell. To learn more about Deriv and find the best alternatives, continue reading below.

Deriv Review

Deriv Overview

Deriv is an online broker that offers trading in CFDs and binary options tied to forex, stock, cryptocurrency and commodity markets. You can read about CFDs here and binary options here.

In short, CFDs and binary options are types of financial derivatives. If you put money in a stock CFD or binary option, you don’t actually get to own the underlying stock. Instead, you are only making predictions on the stock price movements.

Due to leverage, CFDs and binary options are considered high-risk financial products better left to experienced traders.

Because of this, binary options are forbidden in Europe and the US, and while CFDs are allowed in Europe, they are banned in the US. 

Although the broker offers no-commission trading, its trading fees are built into the spread. The broker also charges account inactivity fees for accounts that have remained dormant for a long time.

Deriv supports different deposit and withdrawal methods. It also accepts deposits in other currencies, including cryptocurrencies. The minimum deposit starts from $5.

Deriv Review 2024: Is Deriv Legit? Pros and Cons 1

When you sign up for an account, the broker requires you to select your preferred account currency; you can’t change that later. If you have little money but wish to increase your market exposure, the broker offers generous leverage of up to 1:1,000.

Deriv was previously called Binary.com before it was rebranded. The broker has been in business since 1999. It operates through subsidiaries across several countries and is subject to varied regulatory supervision.

For new clients, Deriv offers a free demo account that provides access to all the markets supported on the platform.

Deriv Review Highlights

📍 Trading products offered

CFDs and binary options on forex, stocks, crypto, commodities and indices.

🌎 Supported countries

Most countries, with the exception of the USA, Canada and others.

💵 Minimum deposit

Ranges from $5 – $50 depending on deposit method.

💰 Deposit and withdrawal fees

N/A

💰 Inactivity fee

$25 after the account remains dormant for 12 months

📜 Regulatory authorities

MFSA (Malta), LFSA (Malaysia), BVI-FSC (British Virgin Islands) and VFSC (Vanuatu).

Deriv Review

Pros and Cons

Pros

  • Low minimum deposit requirement
  • No commission on trades
  • Wide variety of deposit and withdrawal methods
  • Wide range of trading platforms
  • No deposit or withdrawal fees
  • Demo account for trading practice

Cons

  • Inactivity fee charged on dormant accounts after 12 months
  • Trading fees based on floating spreads that make trading costs difficult to predict
  • No sign-up bonus offered to new clients
  • Not available in the USA and UK. 
  • Only offers CFDs and binary options (no real asset ownership)
  • No top-tier regulators

Deriv Review

Deriv Trading Platform

You can access the Deriv trading platform through web browsers, desktop, and mobile apps. The broker offers eight trading platforms to fit various client needs.

These platform options are Deriv MT5, Deriv Trader, Deriv X, Deriv Go, Deriv cTrader, Deriv Bot, Smart Trader and Binary Bot.

Deriv Review 2024: Is Deriv Legit? Pros and Cons 2

Source: Deriv.com

The platforms vary by the depth of market access, trade automation features, and trading tools and resources offered. You can learn more about Deriv’s trading platforms here.

Deriv Review

Deriv Products and Markets

Deriv offers trading in forex, stocks, ETFs, derived indices, commodities, and cryptocurrencies through CFDs and binary options.

In our research for this Deriv review, we took a closer look at the broker’s major products and markets to show what exactly goes on there.

Deriv Review 2024: Is Deriv Legit? Pros and Cons 3

Source: Deriv.com

Forex Market

In the forex market, the broker supports trading in dozens of currency pairs around the clock, Monday through Friday. You can trade forex on Deriv as CFDs or binary options.

Deriv Review 2024: Is Deriv Legit? Pros and Cons 4

Source: Deriv.com

Forex CFD trading is available through the Deriv MT5, Deriv X, and Deriv cTrader platforms. Forex options trading is available through the Deriv Trader, Smart Trader, and Deriv Bot platforms.

Stocks and Indices

Deriv offers exposure to global stocks and stock indices. You can check out the broker’s complete list of stock trading opportunities here. The broker offers stock CFD trading through Deriv MT5, Deriv X and Deriv cTrader platforms. Stock binary options trading is available through Deriv Trader, Deriv Bot and SmartTrader.

Deriv Review 2024: Is Deriv Legit? Pros and Cons 5

Source: Deriv.com

Commodities Market

In the commodities segment, Deriv offers exposure to metals and energy markets. The broker offers commodities CFD trading through Deriv MT5, Deriv X and Deriv cTrader platforms. Commodities option trading is available on Deriv Trader, Deriv Bot and SmartTrader platforms.

Deriv Review 2024: Is Deriv Legit? Pros and Cons 6

Source: Deriv.com

Derived Indices

Derived indices are a special type of financial product that the broker has crafted for its clients. Derived indices CFD trading is available through Deriv MT5, Deriv X and Deriv cTrader platforms. You can access derived indices option trading through Deriv Trader, Deriv Bot and SmartTrader.

Deriv Review 2024: Is Deriv Legit? Pros and Cons 7

Source: Deriv.com

Deriv Review

Deriv Trading and Account Fees

Deriv has different types of fees, including trading fees and account fees. The broker’s trading fees come in spreads rather than commissions. However, we couldn’t find a page dedicated to fees, which is quite unusual for any broker. An enormous lack of transparency contributes to our initial recommendation not to open an account with Deriv.

The broker charges the floating-type spread. That means that the exact trading cost on the platform depends on the account type, market condition and product traded. Because of the constantly changing spreads, you cannot be sure what trade would cost you beforehand.

The broker’s account fees come in the form of charges on dormant accounts and positions held overnight. If your account has been dormant for 12 months, the broker will charge you $25 every six months for the duration the account stays inactive. The broker also charges swap fees on most of its trading platforms for positions held overnight.

Deriv Review

Safety and Security: Is Deriv Legit or a Scam?

According to our findings, Deriv looks to be a legitimate broker, but it could still be a problem. Not a scam. First, the broker is only regulated by low-tier financial authorities. We don’t recommend brokers that are not supervised by top-tier regulators such as the SEC, FCA and BaFin, Second, the broker’s regulatory environment is a little complicated, and traders would do well to understand how it works.

How Deriv Is Regulated

Deriv operates through subsidiaries located in different countries. That means that the subsidiaries are subject to various regulatory requirements. When you sign up with Deriv, you will be placed under any of its subsidiaries, depending on your location and the financial products you want to trade.

Deriv has a subsidiary registered in Malta regulated by the Malta Financial Services Authority (MFSA). Deriv clients in the EU are served by the broker’s Malta-based unit.

The broker has a Malaysia-based subsidiary that is regulated by the Labuan Financial Services Authority (LFSA). Deriv clients from anywhere in the world who want to trade forex and crypto CFDs are served by the broker’s Malaysia unit.

The broker has a subsidiary registered in the British Virgin Islands supervised by the British Virgin Islands Financial Services Commission (BVI-FSC). Deriv accounts that want to trade CFDs on derived indices are served by the BVI-based entity.

The broker’s Vanuatu-registered subsidiary, regulated by the Vanuatu Financial Services Commission (VFSC), also serves clients who want to trade CFDs on derived indices.

Deriv also has a subsidiary registered in St. Vincent and the Grenadines. But this one is not subject to regulatory oversight.

Though it is not openly stated, the St. Vincent and the Grenadines unit appears to be the one that serves clients who wish to trade binary options. Although they are popular financial products approved in some countries, binary options are banned in the EU for retail investors.

How Deriv Protects Its Clients’ Funds

While financial regulatory requirements may vary across countries, they are generally intended to protect investors and market integrity.

As part of its investor funds protection measures, Deriv operates segregated accounts. This means that the broker holds its own money and client funds in separate accounts. As a result, Deriv does not touch its clients’ funds for its operational needs. The benefit of this arrangement is that client funds should remain secure even if the broker faces financial problems or goes bankrupt.

Another measure that Deriv has taken to secure its clients’ money is offering negative balance protection settings. If enabled, negative balance protection ensures that traders won’t lose more money than they have in their accounts.

However, you should note that Deriv is subject to varying regulatory requirements because its subsidiaries are located in different countries, so negative balance protection might not be available to every trader on the platform.

Deriv is also a member of the Financial Commission, a global self-regulatory body of forex brokers. The Financial Commission helps resolve disputes between brokers and traders. It also provides a compensation fund program that protects traders up to €20,000 per complaint.

Deriv Review 2024: Is Deriv Legit? Pros and Cons 8

If you turn to Deriv reviews on Trustpilot, the broker is rated excellent, scoring 4.9 out of 5. That is based on more than 43,900 comments from Deriv users.

Neha Gupta, CFA
Contributor

Neha is a seasoned finance professional with over 17 years of work experience in the investing field.

linkedin