Best Regulated Binary Options Brokers
Best regulated binary options broker - Binary.com (Deriv)
TOP regulated binary options broker:
Binary.com (Deriv) - most trusted broker
IQ Option - best for trading cryptocurrencies
Nadex - best learning platform
When navigating the complex world of binary options trading, choosing a reputable and regulated brokerage is of paramount importance. With many fly-by-night operators seeking to take advantage of unsuspecting investors, it is important to only trade with brokers that are properly regulated. Regulation provides important protections for trader funds and acts as oversight to ensure fair and transparent operations.
This article examines some of the top regulated binary options brokers that traders can safely consider based on factors like licensing status, available assets/markets, trading tools and platform features. We analyze brokers that are regulated by leading authorities to recommend options that suit traders of all levels who prioritize regulatory compliance and consumer security.
Key points from the article
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Binary.com has over 20 years of experience and is regulated by multiple bodies in the UK, Malta and Ireland. However, it doesn't accept traders from the US, Canada, Japan and some other countries.
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IQ Option is one of the largest brokers globally with over 50 million users. It is regulated by CySEC and doesn't accept traders from a few restricted locations.
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Nadex is a US-based platform regulated by the CFTC, making it a good option for American traders. It offers trading across various assets and commodities.
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Other reputable regulated brokers are Pocket Option, Quotex and ExpertOption, which are regulated by bodies like the IFMRRC.
Is Binary Trading Regulated?
In a market that is full of options, finding a trustworthy broker is often difficult. In this era of rampant cybercrime and cyber fraud, you can't just pick the first option you come across. That's where regulated brokers come in. But what is a regulated broker? And why a regulated broker?
Regulated brokers are licensed individuals who are allowed to operate as a trading platform by a competent financial body. Regulatory bodies are watchdogs who regularly monitor and take action when any issues arise related to a broker. They set rules and regulations to safeguard the traders in terms of getting fair market prices and allowing traders to access and withdraw funds easily.
It is usually advisable to work with a licensed and regulated brokerage to avoid losses related to fraud or foul play. To operate in most countries, there are stringent rules regarding the licensing and regulation of brokers. However, not all countries have strict regulation and licensing laws and even allow unregulated brokerages to operate. Let's briefly take a look at the specifics of regulations in different regions across the world.
Regulation in the United States of America
The U.S. has some of the strictest regulations when it comes to binary options. It is a legal requirement for binary brokerages in the U.S. to be regulated by the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC). Within the U.S., these are the financial bodies that allow and grant financial service providers with valid licenses to operate in the country. They are also the ones who suspend these licenses if the broker breaks the rules and regulations put in place.
Regulation in the United Kingdom
There's a difference in how binary brokers operate in the U.K. compared to other countries in the European Union (E.U) due to some different regulations. However, it is legal to engage in binary options trading in the U.K. For brokers to operate in the U.K., they need to be regulated and recognized by a financial authority trusted by the British Financial Conduct Authority (FCA). The UK government is taking necessary measures to apply relevant regulations to binary options trading for customer safety.
Regulation in the European Union
For binary brokers who want to operate in Europe, they need to be regulated and licensed by a body within the European Union. Cyprus is one of the most preferred jurisdictions for binary options brokers and was one of the first to treat binary options as a financial instrument. The Cyprus Securities and Exchanges Commission (CySEC) is the primary regulating body. Brokers in the European Union are also get regulated by the Maltese Financial Services Authority (MFSA) located in Malta. Binary options trading is strongly regulated in Malta.
Regulation in Other Parts of The World
Apart from the U.S., U.K, and the E.U, binary options trading is also regulated in other parts of the world. In Australia, the primary regulators of binary options are the Australian Services and Investments Commissions (ASIC). They are even considered one of the most innovative regulators for leveraging the protection of retail investors. Meanwhile, in New Zealand, binary options brokers are regulated by the New Zealand Financial Markets Authority (FMA). The FMA acts upon the Financial markets Conduct Act to protect customers and provide market transparency.
In Asia, Japan is one of the few countries where binary options trading is legal. Binary options trading is highly regulated in Japan two agencies oversee Japan's exchange markets and securities. The Financial Services Agency (FSA) headquartered in Tokyo is in charge of monitoring the nation's entire financial system. The Security and Exchange Surveillance Commission (SESC) is then tasked with ensuring firms comply with regulations. It acts as a secondary regulatory agency.
Trading binary options are legal even in countries with unregulated markets unless there's a law that specifically states that it isn't allowed. However, it is still important for traders to check the regulations within their countries of residence carefully before proceeding and learning about client rights and broker responsibility. If you are a trader in a country that doesn't regulate binary options, you may still register with brokers regulated in other reputable jurisdictions.
Binary Options Brokers Regulated by Governments
Government institutions are usually the primary regulatory body for most brokers. Below are some of the top government-regulated binary brokers.
| Minimum deposit | Minimum trade size | Max return | |
|---|---|---|---|
Binary.com (Deriv) |
$5 with e-wallet; $10 with debit and credit cards |
$1 |
91% |
IQ Option |
$10 |
$1 |
95% (Up to 100% in case of correct prediction) |
Nadex |
N/A |
$1 |
Varies |
Binary.com (Deriv)
Binary.com is one of the oldest binary options brokers globally with more than 20 years in operation and a great track record to show for it. Founded in 1999, the brokerage offers both CFD and binary options trading. It is regulated by multiple agencies in the British Isles, Malta, Ireland, and the UK. However, traders from the U.S., Canada, Japan, Hong Kong, and Costa Rica are not accepted. The platform offers over 100 different trading instruments across varied asset classes. Unlike most brokers, Binary.com offers traders multiple trading platforms to choose from apart from the popular options. They also allow traders the opportunity to sell contracts before the expiry time to lock in a profit or even minimize losses. The platform is now moving to Deriv and will be known as Deriv in the future.
IQ Option
Launched in 2013, IQ Option is one of the most renowned forex and binary options traders globally. The firm has more than 50 million registered users in more than 200 countries. It is headquartered in St. Vincent and the Grenadines and is licensed and regulated by CySEC. IQ option is available for traders all over the world except in a couple of locations where traders are not accepted. The broker provides over 350 financial instruments in 6 different asset classes.
Nadex
The North American Derivatives Exchange (Nadex) is another popular binary options trading platform. Founded in 2004, the U.S based brokerage has its headquarters in Chicago, Illinois. The firm is licensed and regulated by the CFTC. The exchange lets you take positions on all kinds of options or contracts. Traders have access to a wide number of assets and commodities with which to buy or sell binary options on Nadex.
Binary Options Brokers Regulated by Non-Government Organizations
Apart from government agencies, some non-government organizations regulate brokers. Nonetheless, others still consider brokers that government institutions don’t regulate as unregulated since these agencies can’t fully control brokers. This is far from the truth because these institutions have set rules and guidelines to safeguard client funds and monitor the firms. The Financial Services Commission and IFMRRC are examples of non-government agencies that regulate brokers.
| Minimum deposit | Minimum trade size | Max return | |
|---|---|---|---|
Pocket Options |
$10 |
$1 |
95% |
Quotex |
$5 |
$1 |
95% |
ExpertOption |
$10 |
$1 |
95% |
Pocket Option
Established in 2017 in the Marshall Islands, Pocket Option has been growing tremendously in the market. With more than 10 million clients globally in over 95 countries and regions, the broker has become a top choice for many traders. Pocket Option is regulated by the International Financial Markets Relations Regulations Center (IFMRRC) and has a great reputation. The platform is available for users globally excluding a few jurisdictions with service exceptions.
Quotex
Based in Seychelles, the broker is one of the fastest growing today. Founded in 2020, the platform offers quality services for all users. They have favorable conditions for both experts and beginners. The firm is regulated by the IFMRRC and is safe for trading globally. They provide their clients with more than 410 varieties of binary trading options. The registration process is simple and even beginners can create a Quotex account and start trading instantly.
Expert Option
Founded in 2014 and based in Cypriot, Expert Option is a force to reckon with among binary options brokers. They offer their users more than 100 binary options. Expert Option is licensed by the Vanuatu Financial Services Commission (VFSC) and is regulated by the IFMRRC. They offer an array of advanced tools for their traders and work with over 20 payment systems to make withdrawals and deposits as simple as possible.
Should I Trade with a Regulated Binary Broker?
The simple answer to this is, Yes. Because of the high risks associated with binary options trading, we recommend trading with regulated brokers. With regulated brokers, your funds are safeguarded in case of any occurrences. Most regulatory bodies require that client assets and company assets are separated so the investor's funds are protected in case of anything. Regulated brokers also guarantee sufficient funding to support their responsibilities to their investors. Moreover, regulated brokers are interested in the trader’s success since they are buying options right from them.
Expert Opinion
While regulation is extremely important when choosing a broker, it is not the only factor traders should consider. Other key aspects like trading platform, asset selection, customer service, and educational resources also impact the overall trading experience. When evaluating brokers, I put significant emphasis on analyzing the features and user-friendliness of their trading platforms. Opting for one that is intuitive and customizable makes it much easier to place well-timed trades and implement different strategies. I also look closely at what types of assets are available to trade as not all brokers provide the same breadth of options.
In addition to compliance, it's critical to assess factors like a broker's reputation among existing clients. I always check online reviews from multiple sources to get a well-rounded picture of customer satisfaction levels and identify any recurring issues. Outstanding customer support is also invaluable, especially for novice traders.
Most important is finding a broker you feel comfortable with. Test multiple demo accounts before going live. Consider starting small as you learn, and stick with reputable brokers. Newer brokers may offer appealing promotions but can't prove their long-term commitment to customers the way industry leaders have.
Methodology for compiling our ratings of binary options brokers
Traders Union applies a rigorous methodology to evaluate brokers using over 100 quantitative and qualitative criteria. Multiple parameters are given individual scores that feed into an overall rating.
Key aspects of the assessment include:
Regulation and safety. Brokers are evaluated based on the level/reputation of licenses and regulations they operate under.
User reviews. Client reviews and feedback are analyzed to determine customer satisfaction levels. Reviews are fact-checked and verified.
Trading instruments. Brokers are evaluated on the range of assets offered, as well as the breadth and depth of available markets.
Fees and commissions. All trading fees and commissions are analyzed comprehensively to determine overall costs for clients.
Trading platforms. Brokers are assessed based on the variety, quality, and features of platforms offered to clients.
Other factors like brand popularity, client support, and educational resources are also evaluated.
Glossary for novice traders
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Broker
A broker is a legal entity or individual that performs as an intermediary when making trades in the financial markets. Private investors cannot trade without a broker, since only brokers can execute trades on the exchanges.
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Trading
Trading involves the act of buying and selling financial assets like stocks, currencies, or commodities with the intention of profiting from market price fluctuations. Traders employ various strategies, analysis techniques, and risk management practices to make informed decisions and optimize their chances of success in the financial markets.
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Options trading
Options trading is a financial derivative strategy that involves the buying and selling of options contracts, which give traders the right (but not the obligation) to buy or sell an underlying asset at a specified price, known as the strike price, before or on a predetermined expiration date. There are two main types of options: call options, which allow the holder to buy the underlying asset, and put options, which allow the holder to sell the underlying asset.
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Binary options trading
Binary options trading is a financial trading method where traders speculate on the price movement of various assets, such as stocks, currencies, or commodities, by predicting whether the price will rise or fall within a specified time frame, often as short as a few minutes. Unlike traditional trading, binary options have only two possible outcomes: a fixed payout if the trader's prediction is correct or a loss of the invested amount if the prediction is wrong.
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Investor
An investor is an individual, who invests money in an asset with the expectation that its value would appreciate in the future. The asset can be anything, including a bond, debenture, mutual fund, equity, gold, silver, exchange-traded funds (ETFs), and real-estate property.
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Team that worked on the article
Alamin Morshed is a contributor at Traders Union. He specializes in writing articles for businesses who want to improve their Google search rankings to compete with their competition.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).