Are Binary Options regulated?

Today, Regulation of Binary Options has been done in many countries.

They recognize it as a legit investment therefore have decided to legalize it and regulate it for the public’s safety.

So, the answer is, Yes. Binary options are regulated.

Some of these countries that have regulation of binary options include,

• The United States
• United Kingdom
• Australia
• Cyprus
• Japan and New Zealand

The regulatory bodies in the above mentioned countries oversee, set rules & regulations to protect investors & traders.

This helps you and me to get fair market prices and be able to withdraw your earnings.

In case your country does not regulate binary option trading, you don’t have to worry a thing.

You can still trade binary options. Register with brokers that are regulated under other reputable jurisdictions.

For instance, IQ Options is regulated by Cysec in Cyprus but also available for other countries except the USA. It is not available for the USA clients nor can they access its platform.

So, If you are a U.S resident, IQ options broker is not for you.

Are Binary Options Regulated in the United States?

Yes, binary options are legal and regulated in the United States.

However, the U.S. has the most strict regulations when it come to binary option trading and services.

Its regulatory body is the U.S CFTC (Commodities Futures Trade Commission) and the U.S. SEC(Securities and Exchange Commission).

The Commodities Futures Trade Commission(CFTC) oversees financial securities such as Forex, bonds and Exchanges of stocks and options.

Its mission is to protect the market users and the public from fraud and manipulation. 

Also, the abusive practices related to sale of commodities, futures and options.

Conversely, the Securities and Exchange Commission(SEC) oversees options and futures markets. 

Therefore, for a broker to provide financial services in the U.S. must be regulated by the CFTC and get licence from the SEC.

NADEX(Northern American Derivative Exchange) is main brokerage/exchange for binary option trading in the U.S.

It is operates under the rules and regulations of the CFTC.

In addition, it offers retail trading of binary options and spreads on the most commonly traded Forex commodities and stock indices.

NADEX  therefore legally accepts U.S. residents as clients. It is also part of the IG- Group which is listed on the London Stock Exchange(LSE)

To trade on the NADEX exchange, membership is free and you can start with a minimum of $250 as initial deposit.

Regulation in the United Kingdom

Regulation of Binary Options in the UK is done by the Financial Conduct Authority(FCA).

 It is responsible for regulating, supervising, investigating and enforcing regulations that govern financial markets.

However the Financial Policy Committee(FPC) helps to enforce rules set by the FCA

This simply means binary trading option is legal in the United Kingdom for both traders and brokers.

For brokers to operate in the UK, they must operate under regulations of the FCA regulatory body.

There are a quite number of binary option brokers operating in the UK and some are offshore brokers.

To mention but a few, Fortrade brokers, CT Options, IQ Options.

Regulatory bodies in Europe

When it comes to Europe, the  Cyprus Securities and Exchange Commission (CYSEC) is the main regulatory body for binary options trading.

Brokers can also get license from other EU regulatory bodies such as AMF (France), CONSOB (Italy) or any other options regulator.

The most common brokerage firm for binary options trading is the IQ Option – minimum deposit $250

 Regulatory bodies in Australia

The Australian Securities and Investment Commission(ASIC) is the regulatory body in this country.

ASIC aims to enforce and regulate financial service laws to protect investors and traders.

Any binary option broker has to get their licenses from the Australian Financial Services (AFS).

New zealand

The regulatory body that regulates binary option brokers and offers licenses in New Zealand is the Financial Markets Authority(FMA)

Japan.

When you are in Japan, you can look at these two agencies;

Financial Service Authority(FSA) in Tokyo and the Securities and Exchange Surveillance Commission(SESC)

Final Remarks

All in all, it is very important to understand who you deal with.  Do a good due diligence before you deal with anyone. 

Scammers are real. You must do due diligence to protect yourself from these fraudsters!

Great news is that there are legit companies offering binary options trading.

Like we mentioned before, do good research on the internet.

Alternatively, you can ask other traders on the forums and get to really know the kind of companies you intend to deal with.

Make sure you choose to trade brokers that are regulated.