Regulated Binary Options Brokers
Binary options have become very popular, and with the popularity have come more brokers, some of which are less than reputable. One measure of safety against scams or swindling brokers is to trade through firms that are regulated. When a broker is regulated they are subject to oversight and scrutiny that non-regulated firms aren’t. That is not to say unregulated brokers are bad, or that all regulated brokers are saints, but for serious traders who don’t want the added worry of their broker withholding funds or giving them the run-around, choosing a regulated broker is typically on the checklist of things to have.
Beware Internet Claims and False Information
I ran a Google search and found a number of articles talking about many binary options brokers which were supposedly regulated. Very few of the brokers discussed turned out to actually be regulated, and the brokers themselves didn’t even claim to be. It is possible some of these binary options brokers were regulated at one time, but opted not to be regulated since they can’t accept US clients if regulated by the Cyprus Securities Exchange Commission (CySEC) or Financial Conduct Authority (FCA) of the UK. It is also possible that some of the binary options brokers on this list, while regulated at the time of writing, may not be in the future. Therefore, in each of the of the broker sections below, a link is included to the broker’s regulator for verification purposes.
Scouring actual government and regulatory websites we have attempted to provide a complete list of regulated binary options brokers. The list turns out to be relatively small.
Topoption.com operates under parent company Safecap Investments Ltd., which is regulated by the Cyprus Securities Exchange Commission (CySEC) under license no. 092/08 (at the time of writing this firm is number 111 on the list).
Banc De Binary
Bancdebinary.com operates under Banc De Binary Ltd, which is regulated by CySec under license no. 188/13 (at the time of writing this firm is number 20 on the list). Upon searching for the company in the Financial Conduct Authority (FCA) register it is noted that the firm may be subject to limited regulation by the FCA as well.
www.zoneoptions.com is operated under Rodeler Limited. Rodeler is regulated by CySec under license no. 207/13 (at the time of writing this is firm is number 107 on the list). ZoneOptions.com appears to have opted out of being regulated by CySec as they still accept US customers. Therefore, the parent company in this case is regulated, but ZoneOptions isn’t.
www.optionweb.com is a trading name of Lionsman Capital Markets Ltd. and is authorized and regulated by the CySEC under license no. 175/12 (at the time of writing this firm is number 68 on the list).
Ig.com/uk is a site owned by IG Markets Limited and IG Index Limited of England and Wales. Both these companies are authorized and regulated by the Financial Conduct Authority (FCA) the financial services regulator in UK. This excludes “binary bets” though, but IG Index Limited is still regulated for binary bets under the Gambling Commission, reference 2628.
Nadex.com, is the trade name for the North American Derivatives Exchange, Inc, and is a binary options “exchange” regulated in the US by the Commodity Futures Trading Commission (CFTC).
While many will consider Nadex a broker, it is technically an exchange. Just as in other financial markets there needs to be a buyer and seller in order for a trade to occur. Nadex binary options are quite different than traditional binary options offers by other brokers.
A regulated binary options broker undergoes more scrutiny and shows their intent of sticking around for a while. It is advisable to trade with a regulated broker; unfortunately there are many good unregulated brokers as well. This makes the decision somewhat more complex. Being regulated requires more work for the broker, and therefore small firms aren’t typically regulated but that doesn’t mean they won’t provide great service and a quality experience. Regulation is one a key factor in choosing a broker, but it isn’t the only one. Ultimately you’ll need to decide if you are giving anything up by trading with these regulated brokers. If there isn’t a better alternative, then choose the regulated over an unregulated binary options broker.