Professional and experienced traders across the globe are now trading binary options to grow their funds and earn profits.
However, a good number of novice traders are still unaware about the binary options market or how it really works behind-the-scenes.
With more than a hundred binary options brokers already operative in the market, selecting the right one gets extremely difficult.
In fact, most of these brokers are no more than scams, others are simply more risky to deal with because they are unregulated.
Here, find out what you need to know about binary options regulation and the benefits of trading through regulated brokers.
Why is Regulation Necessary?
Given that the binary options market is relatively new and has multiple definitions in different nations, traders must trade cautiously.
For instance, in the United Kingdom, binary option is listed under the “Gaming” category but regulated by the FCA (Financial Conduct Authority). However, in other nations, binary option trading is considered to be “Gambling”.
This is precisely why binary options aren’t available within all the countries. Also, in the United States, people do not have access to all the assets for trading simply because the U.S. government is more protective of its residents.
In contrast, within the European Union and United Kingdom, traders have access to all types of assets for trading.
Often traders are advised to look for regulated brokers when it comes to trading binary options.
Having said that, while most of the unregulated brokers aren’t reliable, some of them are trustworthy and follow ethical trading practices.
Nevertheless, if you’re serious about binary options trading, it is advisable that you carry out trading via regulated binary options brokers.
It is equally important to research the broker that you’re going to invest your money with, by googling their names as well as looking for reviews in authority review sites such as Binary Options Place.
It’s worth to note that the process of getting regulated isn’t easy. However, once the regulation is in place, the broker automatically gains good reputation in the market as it is a clear measure of their genuine intentions and strong business values as well as practices.
Regulation ensures that the broker is following the guidelines and norms laid down by reputed regulatory authorities. A regulated binary options broker practices fair and appropriate trading rules and regulations.
Thus, when you invest your money through such a broker, you can be fully assured that your money is safe and not in the wrong hands. Besides, regulated binary options brokers offer protection to traders against frauds and scams. Such brokers offer genuine binary options, safer trading environment and appropriate guidelines for trading options.
Also, if a broker isn’t regulated then it does not necessarily mean that it is a scam. The primary reason why regulation is necessary is because a regulated broker always ensures safety of the entire money that has been deposited by their investors.
Such brokers keep the money in a safe trading account, which is monitored via a 3rd party that further ensures fair competition. Given that the binary options market is very new, most of the brokers aren’t regulated. However, in many places such as the US, Australia and Europe, elaborate regulations are being enforced to protect investors.
A few more important aspect you should consider
When it comes to trading binary options, you must take into account other aspects in addition to the regulatory status of the broker. The key aspects are:
- Methods for deposits as well as withdrawal.
- Offers a demo account or not.
- Trade controlling features such as double up, early close and rollover.
- Minimum and maximum trade size.
- Customer service
To sum up, if a binary options broker is regulated and matches your requirements in addition to providing you with all the above mentioned features, then consider trading through their platform.