Why You Must Trade Binary Options With Regulated Companies

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker 2020!
    Free Trading Education!
    Free Demo Account!
    Perfect for Beginners!

  • Binomo
    Binomo

    2 place in the ranking!

Binary Options Brokers

Review of Best Binary Options Brokers

Why You Must Trade in Binary Options With Regulated Companies

The popularity of binary options trading is has grown by leaps and bounds after the introduction of online platforms in 2008. Even it is highly regulated in the US and traders have only limited options available to them. However, in Europe and rest of the world, a number of online binary options trading platform providers have set up operations. Over the years, the regulatory environment has become more stringent with most of the major binary options providers in Europe being regulated by the Cyprus Securities and Exchange Commission (CySEC). Other countries around the world have also started introducing regulatory framework to prevent scams.

The growth in the popularity of binary trading can be attributed to the fact that both seasoned traders and beginners find binary options trading to be simple, easy to understand and straightforward. Moreover, trading in binary options offers a great deal of certainty as far as the rewards and risks are concerned. There are other benefits as well that attract traders to binary options. Some of the benefits are listed below:

  • The potential to earn high returns on investment
  • The risk and reward are known even before placing the trade
  • The possibility getting a part of the investment returned even if the prediction is wrong
  • Binary options are easy to trade and are not as complicated as forex trading
  • As the turnover rate is fast, profits accumulate quickly in the trading accounts
  • Select brokers offer free trading accounts
  • Different types of assets are made available for trading
  • Access to more number of assets
  • It is easy to get started as far as beginners are concerned
  • It creates excitement as the possibility of making a lot of money quickly is very high

This in turn has led to the proliferation of binary options trading platform providers. Some of them are reliable, but many of them are not so. Therefore, it is important that you work with regulated binary options companies if your goal is to become successful as a binary options trader.

Here are some of the main reasons why you should always work with regulated binary options brokers:

#1: When trading binary options, you buy Call or Put contracts directly from the broker on whose platform you have opened a trading account. Therefore, it is important that you deal with a platform provider that is reliable and trustworthy. This is because only such brokers provide accurate advice, quote a fair price and pay you a reasonable return on your investments when your options contracts finish in-the-money by the specified expiration time. When working with regulated binary options companies, you can be sure that they will provide you with best service at all times and on all areas related to trading.

This is because financial authorities in countries stipulate a set of conditions that binary options companies have to comply with. Regulated companies are those that have satisfied these stipulations. Further, the authorities monitor the operation of these companies on a regular basis. Therefore, such brokers often do not involve in malpractices.

#2: Binary options companies that are regulated maintain your funds and that of the company’s in separate accounts. This is to ensure that your hard-earned money remains safe and secure. In the UK, binary options companies that are regulated report compliance to this this effect every month.

#3: Additionally, regulatory authorities ensure that the binary options companies that apply for licenses are adequately capitalized before authorizing them to operate binary trading platforms. Regulators also verify and make sure that the systems employed by them for delivering quotes in real time and payouts they promise for winning trades are reasonable and fair.

However, the capital base to be maintained by these companies may vary from country to country. For example, a binary options company offering trading platform in Malta should have a capital base of 730,000 Euros as per the Malta Financial Services Authority stipulations. This ensures the financial stability of the company.

#4: Regulated binary options platform providers adhere to norms and are transparent in their dealings.

#5: Finally, such companies pay you on time and you can take it up with regulatory authorities, if they fail to do so. If you work with a binary options company that is not regulated, you cannot expect to get legal support.

Some of the recommended binary options companies are as follows:

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker 2020!
    Free Trading Education!
    Free Demo Account!
    Perfect for Beginners!

  • Binomo
    Binomo

    2 place in the ranking!

Broker Min.Deposit Features Score Visit Site
$5
  • Min.Deposit : $5
  • Regulated By MFSA, MGA, MiFID
  • Deposit Options: Credit/ Debit Card, Wire Transfer, WebMoney, Skrill, Netteller, Indonesian Local Deposit
  • Payouts : 80-90%
9.7 Review Visit Site
$10
  • Min.Deposit : $10
  • Deposit Options: Credit Card, Wire Transfer, Skrill, WebMoney, Fasapay, Neteller
  • Payouts : up to 92% *Amount to be credited to account in case of successful trade*
9.7 Review Visit Site

IQ Option was established in 2020. The company, regulated by CySEC, is owned and operated by Iqoption Europe ltd in Cyprus. They take a “no frills” approach and offer binary options trading mainly to Russians and do not entertain clients from the US.

Trading platform: Proprietary platform that supports multiple languages
Demo platform: Available
Mobile enabled: Yes
Trade Types: Classic High/Low binaries
Payout for successful trades: Up to 92 percent
Account types: Real/VIP
Minimum deposit: USD10/USD 1000
Withdrawal: Minimum USD10
Asset Index: Total 78 (Commodities – 1, Currencies – 22, Indices – 6, Stocks – 49)

24option, based in Cyprus, started its operations in 2020. The company is owned as well as operated by Rodeler Limited. Rodeler is authorized and regulated by the CySEC. US Traders cannot open an account on 24option platform.

Trading platform: TechFiancials platform that supports multiple languages
Demo platform: Available
Mobile enabled: Yes
Trade Types: High/Low, Above/Below; One Touch – Touch/No Touch and High Yield Touch; Boundary and High Yield Boundary; Short Term – 30 and 60 seconds, 2 minutes and 5 minutes
Payout for successful trades: Up to 89 percent
Account types: Standard, Silver, Gold, Platinum and Diamond
Minimum deposit: USD250
Withdrawal: Minimum USD10
Asset Index: Total 103 (Commodities – 11, Currencies – 30, Indices – 19, Stocks – 43)

BetOnMarkets.com, established in 1999 and based in Malta and the Isle of Man, was rebranded as Binary.com in 2020. The company, owned and operated by Regent Markets Group, is regulated in both Malta and the Isle of Man. This broker also does not allow US traders to open accounts on their platform.

Trading platform: Proprietary platform that supports multiple languages
Demo platform: Available
Mobile enabled: Yes
Trade Types: Rise/Fall, Higher/Lower, Touch/No Touch, In/Out, Asians and Digits
Payout for successful trades: Up to 110 percent
Account types: One account only
Minimum deposit: USD5
Withdrawal: Minimum withdrawal amount not specified
Asset Index: Total 68 (Commodities – 7, Currencies – 13, Indices – 19, Stocks – 29)

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There are regulated as well as unregulated brokers in the binary options market. Trading in the binary options markets is a reality in many countries. However, in countries such as the US, it is compulsory that the traders should always pick a broker that is regulated. In European countries and many other parts of the world, binary options brokers are regulated by the European Union and some other brokers are regulated by the Cyprus Securities and Exchange Commission (CySEC). It is the most popular forex regulator and is looked up to by the binary options trading community to set up a regulatory framework.

In times before online trading became so common as they are today, one could trade binary options only over the counter from the issuer directly to the buyer. These instruments could not be sold between the periods of issuance and expiry. In the United States, the Chicago Board Options Exchange was started in the year 1973 which started regulating binary options trades. The Options Clearing Corporation in the US was started with the growing need for implementing controls and monitoring binary options trades. Traders were then required to maintain a license for the purpose of exchanging or over-the-counter sales of binary options.

Online binary options started around the year 2008 and pioneers of the online trading operations chose to become licensed and regulated players. This was after CBOE and NYSE Amex launched binary options under the name of Fixed Returns Options (FROs).

Trading binary options is popular amongst the beginners as well as the seasoned traders. Binary options are less complicated and easy to understand. The most important point is that the trader is completely informed of the risk and the reward that is involved in the trades. In the light of this information, it I important to understand that for a binary options trader to succeed, it is important that they work with licensed and regulated binary options brokers to achieve their financial goals using this instrument.

Given below are a few reasons as to why it is a good idea to work with regulated binary options brokers.

#1: A trader purchases binary options directly from the broker that provides the trading platform. It is, therefore, of utmost importance that the trader picks a trustworthy broker to work with. This would mean that the trader has a chance to receive accurate advice, gets a chance to work with fair prices and also assured of reasonable returns in case the trades are successful. Regulated brokers will have more interest in the success of their clients and the traders get the best deal on all aspects of the binary options trades.

#2: Regulated binary options brokers have no choice but maintain the funds of their clients as well as their company’s funds separately. This increases the security of the investors’ funds retained with the brokers.

#3: With regulated brokers, prior to granting their operations license, it is ensured that they are possession of a sufficient amount of financial capital that will enable them to run their operations of providing the trading platform to the traders without any hitch, deliver the appropriate price quotes and offer payouts to the winning trades without any delay whatsoever.

In the real-time scenario, it is true that starting every week, there are close to ten new brokers that start their operations. It is also true that a majority of these brokers function in the unregulated sector. There may be just a handful of regulated brokers functioning in the market. The next challenge is to pick out the best ones from these brokers that you can work with to realize your financial goals. Brokers that are regulated does not necessarily mean that they are good. Choosing the right broker to work involves examination of factors such as the company and its capitalization, the quality and type of trading platform that is offered, type of assets that are offered for trading, security measures, payout methods, etc., among others.

Broker Min Deposit Bonus Payout Regulation Open Account
$5 Up To 90% IOM, MFSA Visit Broker
$1 30% Forex Deposit bonus 80 % CBR, CySEC and FFMS Visit Broker
$10 up to 92% **Amount to be credited to account in case of successful trade* CySEC Visit Broker

Risk Warning : The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.

Lack of regulation may turn away many investors from taking part in binary options trading. Many unregulated brokers are known to indulge in unfair trade practices. These two main factors require that the binary options market must function with regulations. All said and done, it is not an easy task to implement regulations on a global scale.

In the year 2020, CySEC ruled that binary options brokers would comply to the Investment Services and Activities and Regulated Market Law of 2007 – 2009. Implementation of this rule meant that it was compulsory for those binary options brokers functioning in the specified region would have to apply for a license as a Cyprus Investment firm to continue with their operations. Regulated binary options brokers also have to file tax returns as well as submit two-year business plans as part of compliance with the regulations.

Regulations also stipulate that the brokers would have to maintain separate funds of the clients’ capital investments and the company’s money separately. This helped to increase the confidence of the existing clients and helped to bring in many new ones as well.

As a closing thought, investors should not be in a hurry when choosing the binary options broker to work with. They should study the operations of the broker that they have identified patiently and only after they are completely satisfied should they sign the contract. The investor can also make sure that withdrawal of funds is an easy procedure by making a small deposit. In case all these tests turn out positive, the investor can make larger deposits and decide to work with the chosen binary options broker.

It is equally important for the investor to test the customer services department of the broker. The investor should make sure that they get a good response from the customer service personnel to execute their trades successfully. The trading platform can be tested by opening a demo account and working on it prior to making the real-time trades.

In the recent past, many of the binary options brokers have been getting ready to comply with regulatory changes that are on the anvil as well as those that have already been implemented. This ensures that more investors will be trading with regulated binary options brokers in the near future.

Binary Options Brokers

Review of Best Binary Options Brokers

Why You Must Trade With Regulated Binary Options Brokers

Regulation of binary options brokers has been one of the hot topics discussed about by both the observers as well as the players in the market right from the year 2008 when binary trading was introduced for the very first time. Typically, regulation refers to binary options brokers obtaining a license from the financial regulatory authority in the country in which they have established their operations.

Broker Min.Deposit Features Score Visit Site
$5
  • Min.Deposit : $5
  • Regulated By MFSA, MGA, MiFID
  • Deposit Options: Credit/ Debit Card, Wire Transfer, WebMoney, Skrill, Netteller, Indonesian Local Deposit
  • Payouts : 80-90%
9.7 Review Visit Site
$10
  • Min.Deposit : $10
  • Deposit Options: Credit Card, Wire Transfer, Skrill, WebMoney, Fasapay, Neteller
  • Payouts : up to 92% *Amount to be credited to account in case of successful trade*
9.7 Review Visit Site

** Risk Warning : The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose. *

Following the introduction of the online binary options trading, a number of platform providers have come into existence with a view to take advantage of the opportunity. Some of the brokers turned out to be unreliable as they duped innocent traders and ran off with their hard earned money. This called for the introduction of stringent regulatory measures to ensure sufficient protection to the traders.

In the US, the Securities and Exchange Commission (SEC) formed the regulatory framework and bestowed the responsibility of implementing the same on the Commodities and Futures Exchange Commission (CFTC) when binary options started to evolve as a new investment instrument. As of now, Amex offers Fixed Return Options on stocks and Exchange-traded Funds, the CBOE offers binary options on indices and the Nadex offers binary options on a variety of assets, including commodities, indices and currencies.

The financial regulators in Europe are all MiFID members, meaning a binary options broker that has been authorized by the FCA in UK is considered to be authorized by Germany’s BaFIN, France’s AMF, etc. The Cyprus Securities and Exchange Commission (CySEC) regulates a number of binary option brokers that have headquarters in the country.

In Malta, the government transferred the responsibility of overseeing the operations of the binary options brokers from the Malta Lottery and Gaming Commission to the Malta Financial Services Authority (MFSA). This was implemented after MiFID revised its guidelines and recognized binary options as a financial investment instrument.

Japan’s FFAJ has also introduced sweeping changes for regulating the binary options market, specifying as to what trade types brokers can provide to binary options traders.

Benefits of Trading Binary Options With Regulated Brokers

#1: The financial authority in a country stipulates a set of conditions to be complied with by the binary options brokers if they want to provide a trading platform and promote subscriptions to their website. Regulated brokers are those who have agreed to comply with these stipulations. On the other hand, the authorities keep monitoring their operations on a regular basis. Generally, such brokers would not resort to any kind of malpractices or involve in activities that lead to duping their customers.

In many countries, traders are being encouraged by the concerned regulatory authorities to work with licensed websites or regulated binary trading platforms providers. The reason being the risk of working with potential scammers reduces to a great extent. In addition, the governments will also be benefitted because the taxes generated through binary options trading platform providers get channeled back to the coffers of the respective nation.

#2: Regulated brokers have to maintain a minimum capital base (of course, it can vary from one country to another) as specified by the regulatory authority. To give an example, a binary options broker that provides trading platform in Malta should comply with the minimum capital base requirement of 730,000 Euros as stipulated by the Malta Financial Services Authority. This is to ensure the financial stability of the binary options broker.

#3: It is mandatory for binary trading platform providers to keep the funds deposited by traders and the funds they require for their day-to-day operations in two separate bank accounts. This is to make sure that investors’ funds are protected to some extent from detrimental effects like bankruptcy. In the UK, regulated brokers are required to report compliance to this rule on a monthly basis.

#4: Binary options brokers whose operations are being monitored by governmental authorities tend to become more authentic in their dealings. This is because a regulated broker is expected to be transparent and adhere to certain norms.

#5: A licensed binary option broker often ensures payments on time to the traders, irrespective of whether their financial condition is good or not. Investors can take up the matter with regulatory authorities, if the broker fails to make payments as promised. Traders working with brokers that are not regulated cannot get their problems sorted out by anyone.

However, all of the non-regulated binary options brokers cannot be arbitrarily classified as either cheats or scammers. The binary market continues to be largely unregulated even now and there are a few brokers who conduct business in an ethical manner though they do not fall under the purview of a regulatory agency. Many investors are choosing to work with such brokers because of their reputation in the market and are enjoying a great deal of benefits as well.

Regulation may be helpful in protecting the interests of binary options traders, but it can cause problems for people located especially in the USA. In particular, CySEC is very strict about this. The regulator does not allow regulated binary brokers to offer their services to any USA or Canadian customers. Technically speaking, the regulations prevent US traders from accessing only options in commodities and currencies. However, CFTC’s harsh dealing in the past even with some of the legitimate companies has forced to be cautious. Moreover, deciding only to work with regulated brokers prevents traders from accessing options on certain assets that perform better and some of great trading features offered by non-regulated brokers.

Summarizing, the regulation of binary options brokers has been initiated only a few years back. Licenses have been issued to some of the brokers in some countries and authorities are in the process of issuing licenses to many others in many countries. Taking into consideration the scandals and financial crisis witnessed by the world over the last decade, traders cannot be criticized if they are trying to a little too careful by opting to work only with regulated brokers.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker 2020!
    Free Trading Education!
    Free Demo Account!
    Perfect for Beginners!

  • Binomo
    Binomo

    2 place in the ranking!

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