A Busy Year For Binary Option Regulators

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Broker 2020!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Get Your Sign-up Bonus Now!

  • Binomo
    Binomo

    Good Broker For Experienced Traders!

IQ Option No. 1 Software

Is binary options trading legal? The general answer is yes as long as the broker is regulated and offering transparent terms. Many countries recognize it as a legitimate investment instrument governed by their respective regulatory agencies. Binary options trading is regulated in many countries including:

Over the years, binary options trading continued to be a popular financial vehicle for traders who are seeking to diversify their investment portfolio. One of the reasons behind this is its simple trading premise and how it’s easily accessible to investors through online trading platforms. With the emergence of numerous newcomers who want to try it out one of the most common questions is: is binary options trading legal? And, how is it regulated?

In the European Union, countries have varying regulations for trading binary options but license passporting may be used to allow firms regulated from one country to operate in other countries as established under MiFID.

High binary options trading interest leverages tight regulations

Binary option trading is shown as a preferred investment choice for many investors. This is not surprising with the market’s high and quick payouts, simple trading premise, and low initial deposits. Furthermore, the increase in regulations cemented it as a credible and respected trading practice. Regulatory agency watchdogs are regularly monitoring and taking action when an issue emerges such as questionable and unregulated companies that lure investors in as recently reported by Finance Magnates.

When you’re searching for an online trading platform, you may have come across binary options brokers who are proudly proclaiming they are licensed and regulated by governing bodies in the industry—and rightly so. Regulatory bodies are responsible for overseeing and looking out for the best interest of consumers, specifically the traders in this case. They set rules and regulations to protect you in terms of getting fair market prices and being able to quickly and easily withdraw your winnings, among others. For instance, FCA recently announced they are considering taking enforcement action on unauthorized binary options providers in the UK to tighten the security of traders. Since only brokers who abide by these rules are given license to operate under a financial regulatory authority, traders gain confidence when conducting their trades on the platform.

Is binary options trading legal? In some countries, a regulated broker is required legally. In some, it is the desired preference, which encourages many brokers to process their licenses and pass the requirements. Knowing your country’s specific set of regulations is essential as it varies accordingly depending on the country and its jurisdictions. Meanwhile, here are some of the reasons why it’s recommended to engage a regulated binary options trading broker:

  1. Interest in trader’s success since traders are buying options right from the broker.
  2. Separation of company assets and customer’s assets to ensure traders will get their money in case something happens with the broker.
  3. Guarantee of sufficient funds to support their responsibilities to their investors.
  4. Compliance with strict set rules of and guidelines.
  5. Protection of investors when something fraudulent occurs.

IQ Option, one of the leading binary options brokers, is regulated by CySec and it provides you with an intuitive dashboard for your trading.

When looking for a binary options broker, a good place to start is IQ Option. It’s considered as one of the most reliable and innovative online trading platforms in the binary options industry. Traders, regardless of their skill and experience level, are offered all the essential tools and features to start trading such as a demo account, an intuitive platform, and a good variety of assets. Advanced features are available for more seasoned traders while newcomers will appreciate the easy-to-use interface of the broker and a wealth of educational materials available. They can also start with a low minimum deposit of $10 and, if successful, get a 91% payout.

It’s one of the few brokers that open a truly free demo account. You don’t have to deposit any amount before you’re given access to the demo account. Furthermore, opening an account is extremely fast and easy. The platform is also an intuitive trading venue where you have charts with various viewing options and a rich set of information you can maximize. Depositing and withdrawing funds is also convenient with its broad range of payment options available.

For a more comprehensive list of trading options check out our list of popular 2020 binary options brokers.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Broker 2020!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Get Your Sign-up Bonus Now!

  • Binomo
    Binomo

    Good Broker For Experienced Traders!

The short and simple answer is yes, trading binary options is legal in the United States. The US has, if not the most, strict regulations when it comes to binary options which make it quite complex for both traders and brokers. Its financial trading market is regulated by the U.S. CFTC (Commodity Futures Trading Commission) and the U.S. SEC (Securities and Exchange Commission). The former is a regulatory body that’s responsible for overseeing financial securities and exchanges of stocks and options while the latter is for options and futures markets.

These bodies are the ones that allow and grant financial service providers with valid licenses to offer their services and operate in the country. They are also the ones that suspend these licenses if a broker breaks the rules and regulations imposed. As of the moment, NADEX is one of the few licensed companies in the U.S. that’s actually located in the country. The choices are very limited due to the strict and expensive regulatory processes in obtaining a license from SEC.

There are no offshore brokers, or brokers located outside of the US, that have a license to operate in the US; however, that does not mean they are illegal as there’s no law that neither prohibits traders to use offshore brokers nor stops offshore brokers from allowing US traders in their platforms. Hence, US citizens can use a non-US broker instead.

Many of these offshore brokers obtained licenses, most commonly in European Union jurisdictions which are sometimes stricter, that comply with the safety standards and criteria imposed by the US laws, specifically by the CFTC. This way, the regulatory body allows their presence even without awarding them a license as these companies still respect the country’s rules and regulations that ensure the trader’s safety.

Once again IQ Option USA is a reliable broker for all traders from that countries, so feel free to try them out.

Yes, binary options are legal in the UK for both traders and brokers. In fact, it’s one of the places where many binary brokers were first established. There’s a difference in how binary brokers operate in the UK compared to other countries part of the European Union due to some different regulations. But at its core, investing in binary options is a legal and regulated activity for British citizens as there are no laws and restrictions imposed against engaging in this type of trading in the country.

Hence, companies can operate and offer services. However, it’s worth noting that there’s no British law allowing direct regulatory processes for these firms. The important thing that a broker must comply with is to be regulated and recognized by a financial authority trusted by the British FCA (Financial Conduct Authority).

The UK government is taking careful evaluations and consultations in classifying this trading in order to apply relevant regulations for their people’s safety. Some of the key requirements even include segregated funds between trader funds and broker accounts, a clear dispute resolution process, and suitability checks to ensure products are sold appropriately for an enhanced customer protection. In fact, the UK’s financial watchdog is constantly checking firms, especially those that are claiming to be located within the country.

Yes, trading binary options is legal and regulated in Australia. This means you can engage in this type of booming investment market with local Australian brokers and those that are not located in Australia. Since many good ones are located, licensed and regulated in other countries such as Cyprus, you can also trade with such brokers as you prefer.

Australia is authorized by ASIC (Australian Securities and Investments Commissions) which is one of the principal regulators of binary options outside the US. It’s even considered as one of the most innovative regulators for leveraging protection of retail investors.

As a major financial hub with binary option booming in the investing market in the country, it is not a surprise how the Australian government recognizes binary options trading as a legitimate financial instrument. With this, it paves the way for a sound and clear regulatory framework that tightens the security of investors in Australia when trading binary options. Their efforts ensure brokers adhere and comply with a defined set of rules that enables traders to invest with confidence and peace of mind.

Regulations of ASIC

AFSL (Australian Financial Services License) is an initial requirement for brokers in the country. A minimum set of capital requirement and well-capitalized structure are needed to ensure the broker is able to meet its obligations regardless of external factors. With that, there must also be a separation between the company’s operational funds and the client’s funds must be segregated into trust accounts to safeguard the investors’ finances.

Yes, New Zealand has a regulated binary options trading market. Their government recognizes and defines the status of this trading industry which is beneficial for their citizens due to the clarity of regulations. Regulators are updated with the new trends in the financial market and can, therefore, update regulations as necessary. Meanwhile, brokers are aware of their duties and traders are protected by their rights when trading.

The regulatory body in New Zealand is FMA (Financial Markets Authority) which acts upon Financial Markets Conduct Act. It takes a customer-oriented approach to protect customers and provide market transparency. While restrictions are tight, it leaves traders with enough selection of investment options and room to diversify their portfolios.

Regulations of FMA

Specific procedures and requirements are needed for a broker to get their license. For instance, a broker must have a physical location and staff in New Zealand in order to provide their services. It also requires segregated funds.Respecting their rules of conduct is mandatory and the governing body regularly publishes special reports regarding warnings and regulations in a timely manner.

Yes, Japan is one of the countries in Asia where it binary option is legal and regulates this trading. In fact, there are two agencies that oversee Japan’s exchange markets and securities. The first one is FSA (Financial Services Agency) which has a headquarter in Tokyo. Its task is to monitor the entire financial system—which extends to accounting, banking, and insurance—making its responsibilities broadly varied. With that, it has a secondary regulatory agency, SESC (Securities and Exchange Surveillance Commission), for making sure firms comply with the regulations.

This also goes to say that offshore brokers are available to Japanese traders, especially since brokers in Japan are limited due to the costly regulation processes and tight rules in the country. However, there are plenty of options available to traders who reside in Japan and since binary options trading operates in online platforms, geographical barriers aren’t a major hindrance.

Yes, Cyprus is one of the first jurisdictions to regulate binary options by treating it as a financial instrument. It’s the home of some of the best binary options brokers in the industry, especially since it’s monitored by CySec (Cyprus Securities and Exchanges Commission) which is considered as the primary regulators of this trading.

Furthermore, Cyprus is a member of European Union. This means the laws and regulations applied by the country are in line with EU regulations for conformity. For instance, the licenses of binary options issued in Cyprus are mostly valid in the UK as well. The governing bodies ensure only those brokers who put a lot of effort into making their business credible are granted licenses. With that, they guarantee a broker has constant support, realistic promises, proper terms and conditions, and safety of funds, especially when it comes to the point where clients withdraw their money.

Regulations of CySec

CySec is a government agency with the authority to implement new rules and regulations for licensed binary options trading brokers to follow. They are the ones who are constantly monitoring the binary options industry to ensure compliance for licensed brokers and safety of investors. It’s also one of the favorite destinations for brokers who want to operate in Europe because of its established regulations for binary options trading which are clear and transparent. Since the law is enforced, brokers are also required to comply and follow strict rules which give traders confidence when trading in their platforms.

Yes, binary options trading is legal and regulated strongly in Malta. It recognized binary options a part of European Union Market’s jurisdiction in Financial Instruments Directive (MiFID). This document clearly defines financial instruments trading and companies. The regulatory body in Malta is MFSA (Maltese Financial Services Authority).

Regulations of MFSA

Brokers are granted a license if they comply with MFSA’s fundamental requirements such as promoting competition and choice, safeguarding Malta’s reputation into account of the country’s international commitments, and guaranteeing the protection of both investors and the general public. Brokers are also required to meet a net capital of approximately $900,000 to prove the broker can meet their obligations to their client. A higher requirement may be imposed based on the service provider’s volume and scale.

Binary Options Trading Regulation in other Countries

Binary options trading propelled to become one of the mainstream ways of trading after its growth in 2008 and its reclassification as a financial instrument in 2020. It also experienced a wave of regulations and classifications from regulatory bodies which gave it mass credibility. As its popularity continues to rise, more and more interested traders are concerned to know and ask, “Is binary options trading legal?”

As what we’ve discussed in the previous sections, various countries and jurisdictions regulate trading binary options. In these countries, brokers are obliged to apply for a trading license to offer their services. How about countries that do not regulate binary options? While not regulated, technically, it is legal to trade binary options—unless there’s a law that specifically states it’s not allowed. Binary options are not illegal in countries with unregulated markets since there’s no law that neither allows nor prohibits it. With that in mind, it’s important to check the regulations in your country carefully before proceeding to be aware of your rights and your broker’s duties.

If you’re a trader who lives in a country that doesn’t regulate binary options trading, you may still register in brokers that are regulated under other reputable jurisdictions such as Cyprus and Malta, among others. You’ll receive the same protection as these brokers are licensed to treat traders from other countries the same way they’re treating traders in their regulated markets. For example, IQ Option, which is regulated by CySec, is available for the following countries:

  1. Austria
  2. Bulgaria
  3. Croatia
  4. Cyprus
  5. The Czech Republic
  6. Denmark
  7. Estonia
  8. Finland
  9. France
  10. Germany
  11. Greece
  12. Hungary
  13. Iceland
  14. Ireland
  15. Italy
  16. Latvia
  17. Lichtenstein
  18. Lithuania
  19. Luxembourg
  20. Malta
  21. Norway
  22. Poland
  23. Portugal
  24. Romania
  25. The Slovak Republic
  26. Slovenia
  27. Spain
  28. Sweden
  29. The Netherlands
  30. The United Kingdom

Strategies for Short-Term Binary Options

How to trade short-term binary options? We select the appropriate strategies, disclose the nuances of binary options trading with an expiration period from minute to day.

Binary options trading is quite diverse. And if in the foreign exchange market the trading strategy depends on the characteristics of the currency pair, then for binary options one more component is added that affects the applied strategy – this binary option expiration date.

Today we will tell you how to trade short-term binary options. And a little on the topic, if someone does not know what expiration is and how to choose it correctly.

Why do traders prefer short-term BOs?

Short-term options include binary options, the expiration period of which lies in the range from 1 minute to 1 day. Why do traders choose short-term options for trading?

Like intraday trading in the foreign exchange market, trading in short-term binaries is very popular among traders. They even have some similarities – these are increased trading risks, since price movements over short time intervals are difficult to predict.

However, unlike the foreign exchange market, when trading binary options, the trader knows in advance the size of the possible profit and possible loss. It is this factor, together with the ability to conclude a large number of profitable transactions during the day, that determined the demand for short-term binary options among traders.

In addition, if trading on higher timeframes complicates the application of classic trending and other strategies, then tactics designed for intraday trading, scalping and pipsing in the foreign exchange market, can be successfully applied in the binary options market with little or no adaptation. Strategies should be discussed separately.

What strategies are suitable for trading short-term binary options

What is good about short-term binary options is that they are suitable for the whole range of tools of a currency trader – this is technical analysis, indicators and trading strategies. Trends, technical levels, methods of risk and capital management, including the notorious Martingale method, are relevant for them.

For example, for trading short-term binary options are well suited channel trading strategies. Having determined the price channel, the trader buys the Call option near the lower border of the channel (support level) and the Put option near the upper border (resistance level). This method will be profitable both with flat and with a pronounced trend.

Well established for trading short-term BOs technical analysis figures and patterns Price Action. With their help, you can easily determine the pivot points of the price and the direction of purchase of the binary option. Naturally, for the correct definition and trade, it is necessary to know their classification, the rules for the formation and interpretation of trading signals.

It is worth noting that candlestick patterns can also be used when trading binary options, however, a large number of false formations can occur, since it is believed that candlestick analysis gives more accurate signals on timeframes from daytime and older, which is not suitable for short-term binary options.

Do not forget about technical indicators. Indeed, trading strategies are built on their combinations. In addition, some indicators are suitable as a source of trading signals, as well as for analyzing price charts, determining trends, corrective movements and price reversal points.

Total

Summing up, we note that trading short-term binary options can bring quite tangible profits. However, you need to remember in which market you are not trading and which asset and trading strategy you are using, trading is always risky. Therefore, competent money management when trading short-term BOs is very important. Following the rules of money management and knowing how to trade short-term binary options, you can rest assured that your profit will not be long in coming.

Is there a future of binary options. What to expect ?

The popularity of binary options

Binary options have become very popular over the past couple of years. This we can easily track using Google trends. The last peak of the popularity of binary options was in 2020. Binary options “product” is not new, it also became well recognized in the financial instruments market since 2000. We will not leave and go deeper into history. But the fact that binary options exist for a long time remains a fact. Forex in its time, too, has become very popular. Now his trend has well consolidated his position. But trading on Forex still remains much more popular than binary options. The popularity of binary options is primarily due to the desire of many people to find an additional source of income. If we look at the same trend, we can see that it has the character of waves. The peak of interest in certain countries coincides with the deterioration of the economic situation.

How are things now in binary options, brokers and traders?

Nowadays, binary options and their regulation are at the stage of formation. Since in many countries, the duties are assigned to a certain regulator, which should regulate the relationship between these two entities of the financial instruments market. A number of different kinds of works are constantly being carried out in this direction.

– Penalties of unscrupulous brokers become tougher. Fines are raised, licenses are selected in the brokers themselves.

– It is forbidden to use many marketing materials, which, in the opinion of regulators, can cause damage and force a potential trader to invest large sums of money.

– Informing traders about financial risks and warnings about the possibility of losing the invested money.

And this is not yet a complete list of all the innovations that regulators constantly release in order to avoid dishonest work of brokers of binary options and protect their customers from unscrupulous brokers.

A trader or a person who is interested in trading can now sleep much more calmly, since he will now have much more information available that will prevent cooperation with dishonest brokers.

Simplicity of binary options

It is generally believed that the fault of all these restrictions is the simplicity of binary options. Many believe that trading binary options is easy. But as time has shown – this is not so. Trading binary options, like forex trading, requires certain skills and training. Many brokers have training materials that need to be used before commencing binary options trading. As practice shows, only a small number of traders do it. In general, we can note that the availability of binary options is nothing more than delusions that the greedy people are happy to believe in the pursuit of fast money.

Why people is more loyal to Forex than to binary options

This question really interests many. Forex has never been positioned by a potential trader as an easy method to quickly earnings. All very well understood that you can not earn money there quickly. It will take a lot of effort to learn how to profit from trading on Forex. Binary options were perceived as something simple, generally available and “popular”. Everybody wanted to make money quickly, who got it and who does not. Naturally, this caused resentment and a lot of dirt among upset people. But since time, many have begun to realize that binary options are not easy.

What can the binary options broker offer you?

Now brokers of binary options have significantly expanded the types of options that a trader can use in his arsenal. These include:

– Up / Down options

– Options One Touch (One Touch) and No Touch (No Touch)

– Options Boundary or Range

This list can significantly expand in the near future. Since the diversification of the risk portfolio of each trader requires the expansion of the arsenal of types of financial instruments.

What future is waiting for binary options

We will not go very far ahead. Since all surprises can not be foreseen. Let’s highlight the possible main ways of transformation of the market of binary options.

– Tightening of the control policy on the part of regulators, which follow the order in the sphere of binary options

– Decrease in the number of brokers of binary options

– Regulators of different countries will try to limit the availability of brokers in their territory

– Prohibition of binary options trading by state authorities.

There are also positive trends that can bring binary trade to a new level.

– Improvements to binary options trading platforms. Expansion of functionality, addition of new trading tools. Improvement of the risk management system.

– Integration of many regulators for more effective control over brokers’ activity in different countries simultaneously. Brokers receive trust, and traders are better protected from scammers.

– Binary options will soon be available for trading from the largest forex brokers. This trend can significantly affect the competition in the market. In turn, all traders from this will only be in the black.

In fact, no one knows how the binary options market will develop. Will it be popular as forex will only show time.

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Broker 2020!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Get Your Sign-up Bonus Now!

  • Binomo
    Binomo

    Good Broker For Experienced Traders!

Like this post? Please share to your friends:
How To Do Binary Options Trading?
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: