For the past 8 years, binary options industry has an increased popularity among investors around the world, including those in South Africa. By evaluating binary market, it is clear how many binary brokers participate in this industry, more than 300 of them. In order to narrow the choices, traders have to select preferences and broker’s characteristics that suits them the most while trading binary options. One of these preferences is a dilemma, whether to choose broker with regulated status or without one? In this article, we will try to provide our readers with a detailed information regarding binary options regulated brokers.
Regulatory Status in Binary Options Industry
Binary options trading has been subjected to quite a bit of scrutiny lately, with some legal jurisdictions putting the introduction of new brands on hold until a proper regulatory framework is worked out, and with others moving aggressively to block binary options trading sites. At this point, it seems inevitable that some of the currently open markets out there will move to totally ban and block binary options trading operators, as there are experts who firmly believe that the activity is in fact nothing more than another form of online gambling. However, there is more to it than that in binary options industry. Binary brokers worldwide offer traders a variety of trading strategies that traders can choose in the trading process. Strategies are intended for both traders beginners as well as professional traders who evaluate financial market in order to make a correct prediction of price movement when trading with underlying assets.
There has been quite a bit of interest in regards to developing an appropriate legal framework in order to regulate binary options trading too though, and there are already binary options brokers out there which are indeed regulated and operate within the legal bounds of various jurisdictions all over the world. Trading binary options is completely legal and while determining their preferred broker, they can check if broker obtains a regulation licence.
CySEC and Binary Options Brokers
Selecting a proper binary options broker is the first challenge that traders would encounter after making the decision to embark on a binary options trading career. Indeed, although there are an astonishing number of binary options operators in existence with new ones popping up all the time, not all brokers offer the sort of services which every self-respecting trader deserves. The diversity of the market offered for binary options trading is certainly a major factor in this respect, but these days, whether or not the broker is a licensed and regulated entity weighs in as well. The whole regulatory process in regards to binary options trading is only a couple of years old, so at this point, it is clear why traders have questions regarding this topic. Still, there’s a handful who are already fully regulated and authorized to offer the product to their traders, and beginners should definitely stick to these operators, because trading with a regulated binary options broker carries quite a few major benefits.
Reputable brokers like CMTrading, which is regulated in South Africa offer their traders worldwide a whole set of different trading instruments and service, available on their platform. These brokers possess South African or some other license, like the CySEC licence. Majority of regulated brokers obtain this licence which serves as high level of security in binary options trading world. Not all brokers in this industry are trustworthy by default or all unregulated are scam. When we speak in terms of regulation, brokers with CySEC licence maybe inspire more confidence in traders in South Africa and the rest of the world. Such brokers are monitored by EU and hey should follow European laws. For this reason, they are often preferred choice of traders.
In binary options industry, regulated binary options brokers offer much better transparency and the very fact that they have been granted a license by a state authority lends them quite a bit of credibility. Although the majority of binary options brokers – whether they’re licensed and regulated or not – do indeed play by the book, regulated entities have their operation overseen by a central authority like CySEC (Cyprus), the FSA (UK), MiFID (EU) and CFTC (US). In case of foul play, traders can always turn to the licensing authority with their complaints to seek justice.
The rules set by the regulating authorities are strict and unforgiving and no breaches are tolerated. Such rule-breaking carries heavy fines and dire consequences in more ways than one for the broker. The broker can even lose its license, a blow no binary options operation should theoretically be able to survive.