Binary Options Regulation Overview of Regulatory Environment While binary trading has become extremely popular during the last decade, many traders are still hesitant to make investments in this market as a result of fears relating to binary options regulation and the security encompassing options trading. This elevated feeling of concern is to some extent due to the level of trust that traders have with regards to the financial markets. Indeed, there have been a number of binary option scams that have tripped up a large number of traders and left them with a sour feeling in their mouth. Even if a broker is well known and appears to have a strong online reputation, traders are naturally concerned about the legal protections afforded to them in a worst case scenario event.
Review Just who are these financial authorities, aka the Regulators? The commission protects gamblers online by ensuring that services offered by license holders are crime-free, legitimate, and fair.
You may be familiar with the GSC if you have ever played at online casinos; the popular casino PokerStars is another license holder which is regulated by the GSC. While binary options trading is an investment activity, it carries a high element of risk, which means that it overlaps with the gambling industry.
This is why the GSC is a suitable regulatory agency.
Conclusions on binary option regulation History of Regulated Options Although investing in binary options can be both entertaining and profitable, binary options brokerages were largely unregulated in the past. This allowed unscrupulous operators and downright scam-artists to wreak havoc on the industry. Fortunately, reputable regulation bodies have begun to protect consumers. European Regulators The Cyprus Securities Exchange Commission CySEC is leading the way in creating a safe framework that allows binary options investors and honest binary options brokers to conduct business in a regulated environment.
This unfortunately causes them to shut out legitimate companies from doing business with USA traders as well. Why is it important? The main reason to do it is because it can provide you with confidence and trust in your broker.
Binary Options Regulation
Each broker that is regulated by CySEC or another financial authority is meeting the stringent requirements to hold a license. Those requirements protect you, the trader.
They ensure you are being offered a quality product and that the market prices you are receiving are fair. They also ensure you will receive your winnings in a timely fashion. Disadvantages of Regulation Are there any drawbacks to regulation? Unfortunately, yes.
Despite the fact that regulation can be a great asset which protects the trader, it can also make it impossible to trade if you happen to be located in the USA. CySEC is particularly strict about cysec regulation of binary options, and will not permit their regulated brokers to offer services to USA customers at all. In theory, those regulations should only stop US traders from dealing in currencies and commodities on binary options platforms not stocks and indicesbut the CFTC has dealt pretty harshly with some legit companies in the past.
cysec regulated binary options brokers in the us
As a result, most regulated brokers err on the side of caution. What do we recommend if you are a USA trader?
Top 10 CySec Regulated Binary Options Brokers
Thankfully there are some great binary options brokers out there that are intent on continuing to offer their services to traders in the US. And do not forget that you can always trade at MarketsWorld, which is a great choice anyway, since they offer such flexible services.
No matter where you are located, there are a handful of excellent websites where you can trade binary options online safely—regulated or not. Check out our list of Top Brokers and click through to view detailed reviews on each. Happy trading!
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