Regulated Binary Options Brokers
All questions regarding traders’ funds regulations and safety are one of the most discussed in binary options industry since the beginning of their trading in the year 2008.
At first, appearing of options that are binaries was met with great enthusiasm and was seen as a desirable innovation on a financial market which at that time wasn’t at its best condition as a result of a global economic crisis.
Furthermore, a row of unpleasant stories about lots of brokers that were working and offering services in buying and selling binaries began disappearing together with the clients’ money caused a growth and increase of mistrust to such kind of a trading instrument.
The situation got even worse when multiple articles started appearing in such well-known, popular and influential magazines as Forbes and many others which had negative attitude to options that are binaries.
The way out of this situation was an acceptance of documents that were regulating brokerage activity and consequently appearance of regulated by government bodies and authorities brokers.
Why Unregulated Broker is not Worth Working with?
First of all, let’s find out what is the regulation of brokerage activity. To start with, the word regulation means customer’s safety as well as protection of his/her capital from frauds or scam.
Regulated documents determine the order of settlement of a dispute, main trading conditions, the procedure of bankruptcy and norms of responsibilities for wrongful acts of all included parties. Regulated rules establish broker’s responsibility for providing its activity within the limits to not let any deception happen.
Regulated bodies have to watch and monitor the company’s activity as well as stop any illegal activity and provide transparency of all operations.
What can we see, if to look more attentively and precisely to the activity of the majority of unregulated brokers that offer binaries services to people worldwide? At the very beginning – absence of general rules of business conducting because of which, very often, binary options have a reputation of some sort of gambling instead of a serious business connected with financial markets.
Activity of many brokerage firms that are dealing with binaries is absolutely not clear/ not transparent, not controlled on the governmental level and doesn’t bear any responsibility for illegitimacy. Yet the main concern is absence of separate protected accounts for keeping clients’ funds.
How Does Binary Options Trading Look Like Now?
Binary options trading is connected with a high level of risks because if a trader is a novice without certain experience, practical skills and knowledge in this industry then he/she has all chances to lose money. But if a trader has enough skills in trading options that are binaries then the result will always be positive. Such situations happen when the broker is trusted, reliable and honest.
Very often searching for a good brokerage company in the Internet, one comes across scam binary options brokers that pretend to be reliable ones and in such a way earn money from the traders’ losses. It is clear and understandable that the process of making money with such companies is absolutely impossible. That’s why it is so important and necessary to choose a regulated broker with a license which means that it is controlled by different authorities and any financial losses are simply impossible.
What is a Regulated Broker?
Regulation of a financial market and financial activity happens under the control of government bodies, the main aim of which is to protect investors/traders along with their invested funds. Regulated binary options firm corresponds all requirements and standards which are stated by the government and prosecuted under the law. The availability of a license guarantees complete absence of misinformation and disorientation as well as it cannot act against traders’ interests. In simple words, it means that the authorities that regulate and control brokers, follow and defend clients’ interest. Consequently, the outcome of any action will completely depend on a trader and nobody can influence on it.
What is a CySEC License?
Acronym CySEC stand for Cyprus Securities and Exchange Commission which is a part of a European regulator MiFID. This alone stamps that CySEC regulation has an effect and operates in all European countries. Responsibilities and duties of this particular regulator include the following:
- monitoring and controlling the work of Cypriot stock exchange and financial operations;
- performance of firms and investment organizations;
- management of companies that offer investment kind of services;
- providing of licenses to the companies, brokers and financial consultants, penalties and levy for breaching the rules;
What, How and Who Does the CySec protect?
The main question that is asked by thousands of traders is this: “Who and how does the regulator protect?” If to consider, these are European regulators of financial markets which have no connection or relation to former soviet republics. Theoretically, if you are experiencing any kind of problems, you won’t get any help. The rules of tax assessment are only for European countries. Nevertheless, if the brokerage firm has a license, it automatically means that it has money and it will not deceive traders since none of the companies wants its reputation to be spoiled and ruined.
The second factor that should be also paid a special attention to is – in case if some disputable situation happens, binary options user can make and send a complaint that will be considered and later solved.
And the third point that is not less significant is that the availability of a license means not only control and regulation of government bodies and authorities but also that a broker meets all the high-quality and high-level technological requirements. Therefore, result of the buying and selling process depends only on traders.
What is the Difference Between Regulated and Unregulated Broker?
One can stand out the main distinctions between regulated and unregulated brokers:
- Aggressive behavior of sales department – regulated firm offers a service, meanwhile the broker without a license wants to receive investor’s money. This is usually easy to notice, right after the first seconds of talking with a brokerage company’s representative who tries to make you do a deposit in a very aggressive way;
- Promises – firms with licenses don’t have a right to promise profits, but should accurately demonstrate the whole picture of potential risks and opportunities. Whereas not regulated company promises to help traders to make a lot of money within a short period of time;
- Technological parameters – only a licensed broker can be completely sure that there will not be any delays and failures. Moreover, such companies have strong technical support teams that monitor the process 24 hours a day;
- Withdrawals and capital safety – not licensed firms are not afraid of responsibility that’s why delay or don’t withdraw the money at all. And if such situation happens, a trader has no place to go and nobody to complain to;
Is Regulation Really Important?
The first and foremost rule for every brokerage firm is to get a license before starting offering services of a financial kind to thousands of traders. If you notice that a broker is not licensed, then it would be better to avoid cooperating with it; it is simply not worth it and plus it is very risky. Despite this factor, the majority of companies in the United States are NOT regulated but still trusted by American customers. Buying and selling options that are binaries is not that easy as it might seem from the first glance. The reason is pretty simple – its market and environment is so unpredictable, fast and unbelievable that many situations happen including both positive and negative. In case of experiencing some problems (negative situation) with an unregulated firm, you cannot send a complaint, cannot call anyone and anywhere. Therefore, it is highly recommended and advised to spend more time researching and analyzing a broker in line with all necessary criteria rather than have a deal with lies, cheating and stealing.
How Popular is CySEC?
It is a well-known fact that the majority of binary options brokers opt for the CySEC license because it is not that strict compared to others, yet is still effective since it lets offering services once the license is issued. Furthermore, the process of getting it is way easier than any other license. It is especially suitable and attractive for new brokers who just want to be introduced to the market. Keep in mind that simple process of getting a license, doesn’t mean that the company cannot be trusted etc. On the contrary, even the most popular and well-known firms choose this particular kind of license.
Speaking about other licenses, such as, for example, FCA or ASIC – these are mostly aimed at Forex brokers. Though there are many cases when forex brokers select CySEC as a regulator.
What Are the Top-Class CySEC Brokers?
The choice of firms that are dealing with options that are binaries is really wide, yet there are a few brokers that should be definitely paid attention to as they are considered to be the most superior in all aspects including: trading conditions, payments and withdrawals, types of options and accounts, bonuses, strategies and many other things. Here they are: TopOption and 24Option – regulated by the CySEC.
TopOption – is one of the brokerage companies that is aimed at novice traders. Its educational resources, materials and a deposit that is only $10 allows to make money right from the beginning. Besides that, the company provides a wide array of types of options: Call/Put, One-Touch, 60 Second and others. Basic assets are: currency pairs, shares and stock, indices, commodities etc (in general more than 180). Considering the point that TopOption works not only with professionals but also with beginners, it provides individual education along with an opportunity to test a demo-account and constant customer support of managers in case of any issues. To start working with this particular broker, one needs to pass a simple registration process that will not take longer than 2-3 minutes and add $10 to a deposit with the help of debit/credit cards, payment systems: QIWI, WebMoney etc or wire transfer. All in all, this company is very often chosen due to its support, individual approach to every single client, wide array of assets and multiple additional possibilities.
24Option – this brokerage firm is one of the leaders in the market. It is chosen because of offered by the broker wide opportunities that include Russian speaking customer support, educational materials and resources that give a clear idea about binary options trading, strategies etc, free on-line course, different financial instruments, usual software as well as mobile platform for Android and iOS operating systems, which is especially good and appreciated by super active investors who cannot live without opening new positions, checking, monitoring and controlling their trades etc. Taking into account the point that 24Option works in many countries, the quantity of supported payment systems is pretty big, meaning that there will never be any problems with withdrawals or payments.
Regulated binary options brokers protect traders. Trading with a company that has a license, an investor can be 100 per cent sure that the results and outcomes depend only on him/her. Of course, we don’t state that all not licensed brokers are scam and frauds, but the fact remains – the majority of them “play” against traders. It is much better to be sure and confident from the very beginning and trade with a regulated brokerage company.