So, just what exactly is all the fuss about binary options regulation? It seems wherever you look regulation is being discussed and everyone is claiming to be regulated and/or accusing competitors of not being regulated. Well, regulation is a very serious matter, and in many ways it’s a coming of age story for the binary options industry. In a few short years binary options have gone from being a glimmer in the eyes of a few forward-thinking brokers, to a new kid on the trading block often lumped in with spread betting and other types of gambling, to now being respected, renowned, regulated, and a legitimate rival to the forex industry. But with so many brokers out there offering prospective clients all sorts of incentives to trade with them why only trade with a regulated broker?
1. Segregated Accounts
The first reason is that regulated binary brokers have to keep their clients’ funds in accounts that are completely separate from their operational funds. In this way a customer’s money is protected, cannot be moved around and used to pay-out other clients with winning trades. In addition to this were a “run” to take place and a large number of traders file withdrawal requests there can be no issue with liquidity and these requests can be met.
2. Fair Asset Prices
The second reason regulated brokers should always be at the top of your list is that they always follow the letter of the law regarding the way their assets are priced. Being regulated means your firm is constantly being monitored and random on-the-spot platform tests are conducted on a regular basis. In this way no regulated broker would dream of providing their customers with anything less than live prices across all of their tradable assets. Many disreputable firms impose an unofficial spread by forcing clients to buy in at a price that differs from the current market price. This means that for their trade to expire in-the-money it has to beat the price difference as well as move beyond the market price at the time the trade was locked in. No such games are played by regulated brokers, there is no lag on their trading platforms and the prices you see are updated in real time.
3. Dispute Resolution
When trading with an unregulated broker there is no authority between you and the company in question. This is all well and good when you are happy with the services they are providing and everything is going smoothly. However as soon as a problem presents itself trading with an unregulated broker can throw up a world of problems. In these cases you are at the mercy of your broker’s interests whereas regulated brokers must answer to the authority that licences them. Trading with a regulated broker means that there is always an unbiased party between you and the company you have chosen to trade with ensuring that everything is above board. This involves the regulatory body scrutinising all of your broker’s accounts and ensuring that they have behaved lawfully in each case.
So always choose a regulated broker, only in this way is the safety your funds and your personal details guaranteed. In addition to this with regulated brokers you can be certain that fair trading practices are being adhered to and that your interests are being actively protected by a third party at all times.
