List of Binary Option Regulators – Invest in regulated trading

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Binary Options Regulations

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Should binary options be regulated? What is the current level of regulation? Is it sufficient or maybe even too tight? We answer all the questions.

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Claim your free binary option robot, get started with three easy steps:

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  • 1. Your Binary Option Robot will analyse the market and decide, which asset (currencies, indices, commodities and stocks), is right to trade at that point in time.

    2. The Binary Option Robot Will Predict the Price Movement

    Your robot will assess a wide-range of factors, and then make a prediction on how the assets price will move, saying: Call (up) if it believes the price will rise and Put (down), if it believes the price will fall.

    3. Decide on how much you want to Invest

    Then you need to decide how much you want to invest in the commodity and when that investment will expire.

    4. Collect your Earnings

    Finally, you collect your earnings (the good part!)

    The word binary stands for “(something having) two parts”. Binary options are different from the conventional methods because the trades have two possible outcomes, either complete loss of an asset or gain with a fixed compensation. There is no partial recovery. These assets may include money in any currency, stocks, precious commodities like gold, indices, etc. In the field of trade and business, binary options are simple ways to trade underlying assets keeping in mind the fluctuations of the market value of these assets. The more the investor is experienced, the more he will be able to predict the fluctuations.

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    Need of Regulation

    Binary options trades have increased in the last decades as the most favourite online trading ventures. Traders have been making money by simply predicting the directions of assets on various brokers’ platforms. However, incidences of fraudulent brokers stealing hard-earned money from traders have increased in equal measures. To solve this issue, many governments began to legalize and regulate binary options activities to ensure traders trade safely and securely with their money to earn profits.

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    Many countries have financial regulators that regulate brokers who provide binary options services to traders. Some countries such as the European Union members accept brokers who are registered by with one country’s regulatory agency. For instance, the arrangement that CySEC (the binary options brokers regulator in Cyprus) has with the EU countries. Fraudulent brokers may claim that they have a license from a regulatory agency of a specific country. However, it is your responsibility as the trader to double check that the regulator has actually registered the broker. You also need to ensure that the license of the broker is still valid.

    Binary Options trading industry is quite enticing for traders as well as unskilled individuals who do not know much about trading but still tries to make money since the trades are fast and easy to understand. They are simply based on either a yes or a no. This simplicity has attracted newcomers to the financial markets. However, whenever the participation is too high, the risk involved are proportional too. The industry’s trades hosted on some platforms have sparked a huge negative response from the side of investors because of cases of deceit. The trading is basically done on internet platforms. Because most of these platforms operate outside of regulations, investors are at greater risk of fraud. These non-regulated ways of trading have motives to provide the investor with an overall average negative gain without any probability of net profit, which is outside the rules of regulatory bodies. The complaints fall into three categories, which are, denial to refund or credit customer accounts or reimburse funds to customers, identity theft and unethical usage of software to generate overall losing trades.

    To check the scams and stealing, the requisite is to ensure that the investors’ money is going to a trusted account of a third-party which is safe to keep with until the result comes. This is a mandatory part of investment under governmental regulations by government financial regulators. There has always been the need to ensure fair trading practices in binary options so that the money of the clients is not at risk of getting in wrong hands. The already increasing count of the scams is an alarm for the governmental as well other regulatory bodies to check the reforms to regulate the binary trading and strengthen the laws against frauds.

    Free market is usually much better option than tight regulated market.

    Regulation in the US

    Under the federal securities laws in the US, a company need not lawfully offer or sell securities unless the offer and sale are registered with the SEC or an exemption have been created from such security registrations. The terms of binary contracts are provided with a specified return to the investor by the price of the securities in the rule-book of the company’s security policy and may not be sold unless the registered, exemptions from registrations are given in specific cases only. In the absence of any registration or exemption, the offer or sale of the binary option might be understood as illegal. If any of the products offered by binary options trading platforms are security-based swaps, additional requirements will apply.
    Also, some binary options trading platforms operate as unregistered broker-dealers. A person must register with the SEC as a broker-dealer in case he gets engaged in making securities transactions for the accounts of others. All the offerings made by any binary options trading platform, to buy or sell securities, effecting transactions in securities, and receiving transaction-based compensation has to be registered with the SEC. The organization has created an open list of registered brokers called the FINRA’s BrokerCheck.

    Brokers make unregistered security exchanges by some non-discretionary ways. However, there are issues where the registered-broker is not obliged to register an exchange.

    NADEX (North American Derivative Exchange): NADEX is an Exchange body that acts in between the brokers and the trader. However, they take tax from the investors as well as traders during all kinds of transactions. It is authorized by the CFT.They function more like a broker. At present, NADEX is the one and only U.S regulated binary options broker that is legally authorized to deal with the U.S. citizens.

    CFTC Binary Options Regulation

    Commodity Futures Trading Commission (CFTC) is a regulating body that regulates under the act of Commodity Exchange in the US. All firms and individuals who trade with the public or give advice about trading must be registered with the National Futures Association (NFA) in the United States. CFTC ensures transparency and open-marketing maintaining the competency at the same time, protecting frauds and safeguarding public fund. The brokers will have to abide by the law to do business with US residents and to make deals in the US market whereas it is not illegal for US residents to place their trades with offshore brokers. That is brokers registered in other countries cannot accept US traders, so traders can choose between few unregulated brokers who still accept them despite the high chance of being caught and fined. It is taken as illegal for brokers to accept offers, or enter into binary options transactions with U.S. citizens if those transactions are not conducted on a designated contract market. Exemptions are made with U.S. customers who have a net worth that exceeds $5 million.
    In case some citizen purchases binary options from an unregistered broker, he may not get the full benefits and security provided by the federal security that is provided to the investors to protect their investment. In addition, individual investors may not be able to pursue remedies that are available for unregistered offers.

    Regulation in Europe

    The Cyprus Securities and Exchange Commission, well-known as CySEC, is the financial regulatory agency of the Republic of Cyprus and is probably the best known regulatory body in the world of binary options. Since Cyprus is one of the lesser developed economies in Europe, many investors tend to think of the country with little or no financial regulatory regime in place so that it will be easier for them to invest, but the actual reason is that taxes are low in Cyprus. The Commission has the obligations for supervision and proper control in inspecting the brokers. Without passing through the inspection, brokers are not allowed to deal with the investors in the country. There are careful observation and examination of all the necessary documents before clearance. Brokers are treated like financial companies and get bonuses too, but there are rules. The new legislation aims at uprooting the misuse of rights given to the brokers, for example in the case of improper mentioning of terms and conditions followed by blackmailing to withhold the withdrawal by the trader. The Commission noticed that the Terms & Conditions mentioned were usually not understandable. The bonus also is often used as blackmail to stop the trader from withdrawing the funds. All such practices are disabled under the functioning of the new legislation. Despite all these norms, a perfectly fair-trading is not possible. CySEC faces a lot of fraudulent activities of misconduct and scamming like all other binary option regulating bodies. Many cases became very popular, setting an example for the regulating bodies, so as improvements can be made in the policies. The brokers are found to be unregistered; warnings are issued against them.

    Regulation in Australia

    Australia is one of the biggest producers of Binary Options traders. Australian Securities and Investment Commission is an autonomous Commonwealth body. Every entity dealing with any provision of advice related to binary options has to be licensed by Australian Finance Services. When there is a suspicion about scamming, the licensing is retrieved. Opteck, a registered broker with CySEC but not in the ASIC, is an example of brokers that have been involved in scams or are unregistered and have been short-listed for public safety. The Australian customers are allowed to use brokers registered in New Zealand too. However, Australian Binary Options traders are well-known as traders who trade with biggest deposits, are well-educated and pretty much know what are they doing.

    Regulation in the UK

    Since 2005, it was called as betting and gambling. In the UK, amendments in the legislation are quite probable, and consumers may ultimately be offered a level of protection which they have not previously enjoyed. The UK had always been one of the primary countries when it came to forex trading in the past. Since forex trading is very similar to binary trading, UK authorities decided to legalize online trading also. Traders are allowed to invest with both the brokers regulated by the UK as well as by any other European nation that has similar regulatory rules. The brokers also of both kinds are permitted to do their business. Previously the control of binary options trading was left with the gambling commission. In 2020, there was the conduct of a consultation exercise to judge whether regulation of binary options would be better handled via the Financial Conduct Authority, FCA, the report on which still has to come. But it is important to earmark that FCA is not the official regulatory body in the UK at present, as the entire industry in the UK is in a transitional period.

    Regulation in France

    In France, binary options are not regulated but are legal. The French Financial Markets Authority (AMF – Autorité des marchés financiers) has blacklisted certain binary options considered risky, but the list is composed of every major binary firm. It is always recommended to the French traders to invest only with the European brokers.

    Regulation in New Zealand

    The financial authorities in New Zealand have waved the acceptance of legalization of binary options to bring the customers in comfort. Trading binary options are legal in the country. In fact, this new industry is taken as one of the most important components of the financial systems of the country. The country was keen enough to set specific regulatory rules so as to absolve fraudulent brokership and this job is undertaken by The Financial Markets Authority (FMA).

    Regulation in Italy

    CONSOB is the regulatory body in Italy. This assures transparent participation from all the brokers with no coveted information maintaining the accuracy of information about the brokers. The company names are listed where the people can safely invest. Italian authorities are quite strict when it comes to binary options trading, CONSOB issues warnings about unauthorized companies providing binary options services and fines with an amount as high as €500,000. When it comes to accepting the norms of regulatory bodies of other countries, all licenses issued by outside authorities are reviewed again and only after approval by CONSOB.

    CONCLUSION

    It is to be remembered that Binary Options are a financial innovation of the contemporary world, and hence not much work has been done by the finance authorities to set up a well-defined legal system for trade between investors and brokers. It is only recently that the regulatory framework to regulate binary options is being drafted out.
    Even though binary options trading are quite easy, there is a large fraction of the population which is reluctant to invest.
    For the past few years, the binary options trading had been compared with the gambling industry and largely been operating without any regulation. It is just obvious that many of the binary options brokers available on the internet are located in distant offshore places. Although, because of intense lobbying by consumer interest groups and regulatory bodies, there is a shift towards regulating the industry. Since the beginning of 2020, many nations took the agenda of creating a well-defined set of regulatory guidelines to the trading of binary options in their countries to safeguard citizens’ money. Although not completely satisfied and supportive to the completely regulatory industry, many leading brokers have understood that there are advantages of legitimacy.

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    Her Majesty’s Treasury plans to move binary options regulations from Gambling Commission to the Financial Conduct Authority.

    A recently published draft legislation consultation paper by Her Majesty’s Treasury shows that the UK government is set to switch the regulatory framework for binary options trading from gambling to financial trading. This development is part of a larger trend in the European Union to redefine the legal status of binary options as exemplified by the first Dutch binary options license.

    When the UK adopted the EU’s Markets in Financial Instruments Directive (MiFID) rules it did not extend the scope of the British financial regulators to cover binary options. The UK’s approach was in line with how it believed the Committee of European Securities Regulators (“CESR”) analysed the scope of MiFID.

    Therefore, under current UK legislation binary options are classified as bets and are supervised by the Gambling Commission rather than the Financial Conduct Authority (FCA). However, different Member States have taken different approaches to this issue. Several European Member States include binary options within the scope of their transposition of MiFID financial instruments.

    The UK government now says this creates inconsistencies in approach as to whether firms offering binary options can or cannot passport across the EU. It also means that there is confusion for potential purchasers of binary options about their status and potential inconsistencies in consumer protection for what can be risky products.

    Additionally, recent publications by the European Commission on binary options indicate that the Commission believes that certain binary options are within the scope of MiFID. Still, the uncertainty in the EU about the status of binary options have not lead to any specific amendment to MiFID II.

    However, HR Treasury says that in the light of the growth of the binary options market and concerns about consumer protection, the British government considers it appropriate to consider their status under the existing directive and revisit the UK’s transposition of this element of MiFID.

    Enhancing Certainty

    The UK government is now of the view that binary options, where they relate to specific underlyings, are appropriately viewed as MiFID financial instruments. It therefore proposes to bring activity in relation to these instruments within the regulatory perimeter, where they are derivatives in relation to which an investment firm or credit institution is providing or performing investment services and activities on a professional basis.

    Such persons providing specific binary options, under the draft amendments, would require authorisation under Financial Services and Markets Act (FSMA) and be regulated by the FCA. Although there are supportive legal considerations in deeming certain binary options ”financial instruments” and specifying them as investments, there are also strong policy reasons for doing so, the goverment says.

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    In particular, binary options present similar risks to derivatives and classifying them as financial instruments would ensure that providers would be subject to specific regulatory requirements in relation to organisational and capital requirements and that the range of investor protection rules in MiFID would also apply. It would also mean that the specified binary options are brought within the scope of the market abuse regime.

    The British government is seeking comments on its proposed draft legislation to bring certain binary options within the legal framework that covers contract for differences (CFDs) in the UK.

    The consequence of this drafting is that a binary option is a financial instrument in circumstances where similar derivative contracts would also be regarded as financial instruments, for example, where the option relates to currencies, stock indices, individual shares, commodity prices and economic statistics. The draft amendment would therefore capture a wide range of binary options.

    The UK government is particularly seeking responses in relation to whether this draft legislation raises any problems in relation to scope of what would be captured. For example, a binary option in relation to climatic variables would appear to capture a range of binary options that might not ordinarily be considered to be financial.

    Gambling Commission Reaction

    A spokesperson for the UK Gambling Commission (UKGC) commented on the development: “For most existing licensed gambling operators this will have little or no impact on their business.

    “Binary options account for less than 1% of the Gambling Commission-regulated online gambling market. Operators who offer binary options alongside more traditional betting products will merely find this part of their activity regulated by the FCA.”

    However, the spokesperson clarified that binary options firms will not need to apply for a gambling license this year, “This is to avoid relevant operators having to make applications and pay fees that might later prove unnecessary.

    “The effect of this is that operators will not, for the time being, require a gambling operating licence to offer binary options, and no application to the Gambling Commission to do so will be necessary until further notice.”

    Indicators of binary options trading without redrawing

    We all want to find the perfect indicators for binary options without redrawing to minimize losing trades. It is desirable that these indicators fit into one or more currency pairs, and could be used for any tool. We are talking about dial indicators and colored dots indicating sales or purchases.

    There are different types of indicators: trend, flat, counter-trend, scalping, arrow. There are those that are redrawn, and those that are not. In this tutorial, we will look at each type of indicator for binary options, determine which one is better and which is not. Also consider the features of the indicators for BO without redrawing.

    “Redrawing”?

    Redrawing of the indicator – is when the story shows one, and in real time is quite another. Indicators, which draw values in the course schedule, and then in a few candles change their appearance, adapting to the price value is common in the Forex market.

    To better understand how does the redrawing looks, we will show an example in the screenshot below:

    Figure 1. Example of redrawing in binary options

    That is, redrawing indicators draw the past movement of the candles. In fact, such indicators can be considered useless as the trade on their incorrect signals will lead to a drain of the deposit.

    How to determine whether the redrawing exists on the indicator for binary options

    Here we come up against the fundamental question of defining indicators for binary options that redraw the values on the chart. After all, before using a particular indicator for binary options, you need to make sure that redrawing will be absent in it.

    To determine the redraw of the indicator is quite simple. There are several ways to do it:

    • choose any timeframe observed for the Japanese candles. Usually divergent candle indicator can be seen after 25 candles;
    • search of redrawing is part of the testing strategy: you can monitor transactions only for sale, only on the purchase or on both purchase and sale;
    • if it is a commercial unique indicator, so before buying you can ask its vendor to provide a free version to get rid of it through the strategy tester. And it will show whether it redraws signals or not.

    The principle of operation and features of indicators without redraw

    The principle of operation of the indicator without redraw is clear – drawing on the chart of arrows or other elements (for example, colored pixels), which indicates that you need to open PUT option or CALL. The main thing here is that the chosen indicator by the trader worked without redrawing.

    Figure 2. Indication without redrawing by dots and arrows

    It often happens that the indicator without redraw can show the colored dot of some of the size. These signals indicate that the price of the asset more likely to continue its movement in the direction mentioned by the indicator without redraw. Such signals allow the next candle buy CALL option or PUT depending on signal.

    The basic principle on which the indicators without redrawing work, is a signals formation (arrows) at a time as soon as the price repulsed from the high/low or will form some pattern. It all depends primarily on the algorithms of his work.

    Almost all arrow indicators established such a rule, that the signal is a red arrow down means sell (PUT), and the blue up arrow is a buy (CALL). As soon as such a signal appears, the delay is like death. We must act quickly. At the opening of the next candle you need to be ready to go in the direction mentioned by arrow.

    Difficulties and problems

    Profits on the binary options market, depends on how precise the choice of the direction of price movement is. There are two main difficulties.

    Difficulty No. 1. The indicator redraws its signals

    When testing the indicator on the history that draws signals at first it seems that it just perfectly predicts the price movement of any asset. But while trading in real time all the pitfalls coming up. And everything is not as rosy as it seemed at first glance. That is, the disappearance of arrows or colored dots. This indicates that the indicator redraws. The problem may lie in the algorithms of its work.

    Figure 3. The indicator redraws its signals

    Change of location of the indicator upon receipt of new values of quotations. Frustrating when a trader opens a transaction on the signal of the indicator, but after a certain period of time the signal disappeared, then it becomes obvious that trading strategy with its participation is doomed to failure.

    If the indicator for binary options trading without redrawing really “doesn’t draw“ the signals, it means that its arrows in no case should change its position or direction.

    Difficulty No. 2. A high degree of reliability of the signal

    In the Forex market and binary options there are many kinds of arrow indicators. But not all of them are suitable for the options market. If we talk about Forex trading – even the indicator with redrawing may work, because you can always wait for the right trader price reversal to close in a profit position. But for binary options you need greater precision, and any errors, especially drawing, is absolutely unacceptable.

    The dial indicator should give a very accurate signal, especially in relation to the next 2-3 candles.

    Ways to avoid problems or 7 signs of a reliable indicator for binary options

    Really reliable, and therefore profitable indicators should:

    • to deliver signals without redrawing;
    • work with any asset and any timeframe;
    • to operate on all types of accounts (real, demonstrative, ECN);
    • not to miss the best entry points;
    • provide anticipating price signals so the trader has time to make a deal;
    • open code, so it is possible to make adjustments under certain conditions;
    • confuse the trader during a flat with large number of false signals.

    Arrow indicators for BO without redrawing have such positive things:

    • determination of the moments, when the next few candles will close in profit without any amendments;
    • the minimum expenditure of energy aimed at technical chart analysis with the purpose of finding favorable points for transactions;
    • minimization of the number of errors that occur when using conventional indicators, which are constantly recalculate their values.

    Figure 4. Indicator Scalper MA without redrawing

    Types of indicators for binary options without redrawing

    Figure 5. The indicator without redrawing

    On the binary options market there are 5 main types of indicators without redrawing:

    Consider an example of each indicator separately.

    Scalping

    Here is an example of scalping indicator for binary options:

    Figure 6. Scalping indicator for binary options Binary Option Arrows

    Green vertical stripes denote profitable trades, red – unprofitable. Often, scalping indicators for BO involve trading on small time frames M1-M5. The expiry time one or two candles.

    These types include such indicators as: EMA, Catx, SMA and ADX. They best define the trend, but also show that might involve a possible bounce from moving average.

    Usually trading on binary options by trending indicators suggest a longer expiry, up to the candle. The time interval can be anything. The most important thing. In this time, there was a bearish or bullish trend.

    Figure 7. Trending indicator Catx

    This type of indicator involves catching pullbacks (bounces from levels). A good indicator for BO which will not redraw the values is considered as the Bollinger bands. Signal for the opening of the option will serve as the price reaches one of its lanes and return to the moving average. You can work on the rebound from these bands. The expiration time is up to 8-10 candles, any timeframe.

    Figure 8. The counter-trend indicator Bollinger bands

    Good results on flat movements show the indicators-oscillators. They oversold and overbought zones allow to accurately enter the market.

    For example – Stochastics. Its signals are perfectly show that the price is overbought or oversold, then there is a high probability of reversal. The level of purchase – area (0-20), sales area – area (80-100). The time interval of trading: any, the expiry time: few candles.

    Figure 9. The Stochastic Indicator

    Arrow

    In most trading platforms this type of indicators are somehow unavailable. But arrow indicators for binary options without redrawing can always be downloaded free on the Internet. It often happens that the indicator shows good signals, which later turn to traders with profit.

    Figure 10. Arrow indicator Scalper MA

    Best binary options indicators without redrawing

    Best indicators without redraw for the binary options market, of course, considered to be arrow.

    Profit Sunrise

    This indicator for binary options is one of the most accurate. It is based on unique algorithms that exclude various market noise. Testing has shown that a powerful Profit Sunrise indicator for the year showed a 91% of profitable trades.

    Figure 11. Indicator Profit Sunrise

    “QQENew”

    Profitable the “QQENew” indicator without redrawing just created for binary options trading. Its algorithm is based on the smoothing values of RSI. In the histogram below you can see the intersection of the red and green lines between them. At thi time the signal is given.

    Figure 12. Indicator QQENew

    When the signal lines intersect the indicator “QQENew” will sound an alert. Trade on this indicator will be more profitable if you use additional filters of a trend.

    RSI – RSX

    High-yield trading system for binary options RSI – RSX showed that among the 14 transactions 13 –in-the-money, 1 – loss. In the base of a system the zones of the RSI indicator (0-30) and (70-100) are used. For example, the price dropped into the zone 0-30, then we need to wait till it gets out of this zone. The expiry time of 5 minutes, if the timeframe is M5. Sell trades should be considered, when price entered the zone (70-100) then there is a reduction. We open the option of PUT.

    Figure 13. Indicators RSI — RSX

    Indicators for binary options – tips

    It is better to use arrow indicators for binary options without redrawing. Although there are many profitable indicators which do not draw signals. Open a demo account with one of the most reliable Forex brokers.

    Installed Metatrader4 terminal allows you to test profitable strategies for binary options. Always consider the direction of the global trend. Do not risk more than 10% of your deposit per trade. Do not deviate from the trading strategy, which for several months have been tested on a demo account, and you will profit!

    Best Binary Options Brokers 2020:
    • Binarium
      Binarium

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    • Binomo
      Binomo

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