For most people, foreign exchange trading is only dabbled upon by large financial institutions, over-rich people, large companies, and the […]
IMPORTANT UPDATE AND WARNING:
We have recently received complaints and read many negative reviews on the internet about regulated binary options brokers using indecent practice towards traders. Although some binary brokers may be regulated, we do not recommend opening a trading account with ANY broker, be it a regulated broker or a non regulated broker, as THEY ALL seem to be unethical and non-trustworthy, even the regulated ones! If you have been scammed by such a company you can check out our RECOVER FUNDS FROM BINARY SCAMS section.
Also, instead of trading binaries which are mostly scams, you can trade with a trustworthy and popular FOREX broker such as FXORO. If you are looking for a one of a kind live trading room we also recommend Trademy trading academy.
Binary Options Regulations
CySEC is currently the largest regulatory agency in the financial markets and has issued just over 20 licenses to binary options brokers out of more than 250. Those brokers that have been licensed by Cypriot watchdog have an advantage in that traders are more confident that their interests are protected and so they tend to prefer to transact business with regulated brokers.
In Russia binary options are regulated by the Bank of Russia and in Belgium by the FSMA. The Australian watch-dog is called ASIC.
In South Africa the FSB has regulated and licensed AnyOption. When binary options trading just begun to take off, it was not a regulated practice. However, with the development of binary options trading, there has since been the introduction of binary options regulations. These regulations were implemented as a way of protecting traders from scamming and also as a means of stemming the occurrence of unfair trading practices. Once some brokers discovered the tremendous earning potential of binary options, they began to abuse the system and to rob traders by not allowing them to withdraw their trading returns or by making the process extremely difficult. Thanks to the introduction of regulators, brokers and traders now feel more confident when trading in binary options.
Some of the more popular regulated brokers include Stockpair, 24Option, NADEX, AnyOption and TopOption. Other benefits of regulation include the compulsory segregation of broker’s and trader’s funds as well as access to formal dispute regulation for traders who have that need. The regulators also conduct suitability checks to ensure that the products offered by regulated brokers are not misrepresented. The biggest impact that binary options regulation has had on binary options trading is that it has raised the confidence level among investors and traders. Brokers also benefit from increased business.
What Does it Mean to Have Binary Options Regulated?
Up until very recently, it was not the norm to have binary options regulated. In fact, binary options trading had been unregulated for quite a while until about 2008/2009 when regulators began to start taking steps to protect investors. When binary options began to take off in those earlier days, many regarded the practice as gambling and in some jurisdictions such as the UK, the industry was regulated by the Gaming Commission. However, things have changed quite a bit and now regulation is available for binary options traders.
Regulated Binary Options Online Trading
It must be noted that regulation is not mandatory. Unregulated brokers can choose whether they want to be regulated or not. At the same time, the ultimate decision to regulate rests with the regulator who may choose not to regulate a provider for whatever reasons. However, it is usually in the broker’s best interest to agree to regulation. This is because it has been shown that traders tend to have more confidence when trading with regulated providers. This means that regulated brokers are likely to get the bulk share of the market while unregulated brokers get what’s left.
Regulation means that brokers will come under the scrutiny of the regulator and they will have to abide by certain rules and principles in their trading processes. All systems and processes including the trading platform that regulated brokers are using will have to meet certain standards before any licenses will be issued. This reduces the likelihood of scamming and fraud among binary options brokers and also provides greater levels of protection for traders who may file disputes. Normally, regulated brokers are required to have separate account for client funds which creates greater transparency and trust. Currently, the most active regulator is the Cyrus Securities Exchange Commission (CySEC) which is regulating more than 20 brokers.
The Best Binary Options Platforms
There are so many binary options technology platform providers that it is sometimes difficult to decide which one is best from a broker’s viewpoint. Nevertheless, there are some names that keep popping up whenever one mentions binary options. Among the list of top providers are SpotOption, Tradologic, Hello Markets, Markets Pulse, TechFinancials, Panda, O-Systems, AirSoft, BinaryStation and TradeSmarter. While these platforms are similar in several respects, some of them stand out based on the uniqueness of the technology that they utilize and their reputation.
SpotOption is a very popular and well respected platform that is supported by proprietary software. Based on its long time existence, SpotOption has the advantage of experience in the market. Therefore, they have tailored their system to expertly meet the demands of brokers over the years. In fact, SpotOption now claims to control as much as 70% of the binary options market; serving more than 250 brands worldwide. This platform is also among the most versatile in the world today.
TechFinancials also stands out from the other platforms being the very first and only binary options provider to be listed on the London Stock Exchange AIM market. This speaks volumes for how well respected this platform is in the marketplace as well as to its innovative trading technology. TechFinancials public listing makes this platform among the most trusted and reliable in existence.
When shopping around for the right binary options technology platform, reputation should be among the priority features. While some newer platforms have not had ample opportunity to establish themselves in the market yet, the older, more well-known platforms will continue to be at an advantage. However, newer platforms can gain leverage by utilizing unique technologies that better meet the demands of users. Knowing the market well will help where that is concerned.
Getting Started With Binary Options
What are binary options? Binary options are special types of options in which there are only two possible payoffs – a fixed amount or nothing at all. So with binary options trading, you either gain or you lose everything. This makes binary options trading somewhat risky but the rewards may also be very attractive. Like regular options, these types of options derive their value from some underlying asset such as a stock, index, currency or commodity. Gains are made when the underlying asset makes a gain. On the other hand, everything is lost when the underlying asset records a loss. When a trader believes that the value of the underlying asset will rise, that is called a “call” option. When that trader believes that the value of the underlying asset will fall, that is called a “put” option.
Trading of binary options may be done through online platforms or locally through platforms located on a broker’s computer system. Online trading has become a very popular way to trade because of the convenience and ease of trading that it provides. Most online trading platforms allow you to open an account by just providing some basic information such as email address and a password.
Many platforms allow traders to set up demo accounts with which they can learn how to navigate the platform and how to execute trades without actually investing any funds. Once the trader is comfortable with the demo account, he can then open a real account and begin trading. Many platforms require traders to invest a minimum amount. In addition, traders usually have access the charting information as well as to educational resources designed to help them become better traders. Getting started is relatively simple. However, those traders who are new to the practice, should take advantage of demo accounts which will help them to better understand trading.