Regulated Brokers
As trading in the financial markets becomes increasingly popular, more products and services enter the market. It is therefore sometimes hard to keep track of the sustainability and reliability of those products. Binary options is just such a market as they have only been around since 2008 when the Securities and Exchange Commission (SEC) approved this form of online trading.
How to Find a Trusted Broker?
With the emergence of new markets comes a large number of new brokers. Often unregulated, these binary options brokers are an unknown quantity and especially if you are new to trading in the financial markets, this can lead to confusion. Binary options trading can be extremely rewarding for professional traders and newcomers but you need to find a reputable broker to deal with and one who you can trust with your money.
This is one of the basic hurdles that you will need to overcome before you take the plunge into the exciting world of binary options trading. Bearing in mind that there is also a huge amount of information or misinformation that can be found on the internet posted by irate traders, and sometimes, competing brokers, how do you go about finding a reputable binary options broker when you are faced with a choice of hundreds of other firms?
One of the most important issues to consider when choosing a binary options broker and opening a trading account is whether they are regulated. For the binary options market, regulation will ensure that your funds are safe and that you are paid your trading profits accordingly.
Basically any company can set up and launch a binary options trading platform but the most reputable binary brokers will have usually obtained an actual trading license distributed by a financial oversight commission. Licenses are awarded to trustworthy brokers as many national governments are recognising binary options as a legitimate investment vehicle.
A license is essentially a contractual agreement stipulating that the broker must follow a series of rules and oversight regulations that ensure that traders can confidently and reliably use the services provided by the broker. These may include receiving withdrawals in timely fashion upon the client’s request and ensuring an overall fair trading platform, including the integrity of price quotes. Breach of these regulations can result in fines, legal problems for the company’s owners and revocation of their licenses.
To reiterate, it is recommended that as a binary options trader you should find a broker that has a license from an oversight commission for your own safety and to limit the chance of becoming a potential victim of fraud and general business misconduct. With some level of regulation now increasingly common in the industry, you should do business only with regulated brokers.
Binary options trading has regulation in several jurisdictions with reputable financial oversight commissions. Here is a list: United States/ Commodity Futures Trading Commission (CFTC), United Kingdom/Financial Conduct Authority (FCA), Cyprus/Cyprus Securities and Exchange Commission (CySEC), Japan/Japan Financial Services Agency (JFSA), South Africa/Financial Services Board (FSB), Belize/International Financial Services Commission (IFSC) and Malta/Malta Financial Services Authority (MFSA).