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Thread: Regulation!

  1. #1
    Active Member

    Regulation! !!!

    What exactly happens to a US account once a broker is
    EU regulated? I am getting conflicting information from several brokers.
    Here is what I am told:

    24 Option, US accounts have been blocked

    Opteck, Us can continue trading if they have an account before regulation

    LBinary, US accounts will be terminated and refunded after regulation

    Stockpair, sure you can keep trading after regulation ( no they are not regulated yet! ) if you are US

    Ok, anyone know the real scoop here? Anyone US with a broker that got regulated? What happened to your account?

  2. #2
    Legendry Member Michael Hodges's Avatar
    It is confusing I know, It is my personal mission to understand the regulations and it is hard. The CFTC has stated that it is in fact illegal for unregulated binary options brokers to operate in the U.S. or market to U.S. citizens. What is not illegal is for U.S. citizens to trade binary options or for brokers to accept U.S. clientele. What makes it tricky is that U.S. traders with a beef complain to the CFTC and then brokers start getting shut down. This means that some brokers choose not to accept U.S. custom simply for the SUCKY factor, some do it in ways that try to limit the SUCKY factor (only allowing trading on stocks, no forex or commodities) and others are still allowing U.S. traders to join. The hard thing for us in the states is keeping ahead of the curve. Hopefully we will get something worked out soon so we can trade without the shadow of the CFTC looming over us!

  3. #3
    Senior Member linda_fx's Avatar
    I also think that mostly some traders complaining about their experience are initiating this polemic against binary options trading and as a result CFTC take an action to ban the unregulated activity for US clients. Actually this is not fully possible at the moment. The very important question is what exactly the regulation requirement mean!? Regulation by CFTC or regulation anywhere in the world? For now it looks too difficult for most of the good brands like 24Option, StockPair, AnyOption all of them are still far from US regulation, besides this some of them are already achieving CySec Regulation, which is recognized in all the European countries. There is no problem for US traders to trade with EU regulated forex brokers, which are offering 500:1 leverage and which is much more riskier in my opinion than trading binary options with small risk.. but these are the current rules, and we have to fight and pledge for new binary trading rules which will finally give the right for American traders to trade freely these great new financial instruments like binary options, pair options and many other exotic types of options.

  4. #4
    Rookie Member
    Simply put, it is illegal for a US binary options trader to utilize an Over-The-Counter binary options broker outside of the US. If a foreign broker chooses to allow US clients to open and fund an account, they do so at their own risk. My primary concern was retrieving my money when I utilized a firm out of Israel. To make a long story short, it was an incredible hassle because they were not allowed to send funds back to the US for fear of legal action.

    US traders are forced to use one of three existing binary options exchanges (yes – exchanges NOT OTC shops) regulated in the US by the CFTC. They are Cantor Exchange, CME and Nadex.

    I have accounts with Cantor and Nadex. I use the Cantor Exchange purely for their 5 min. FX options. If I’m bored or stuck on a long conference call, I trade via my iPhone or iPad with their very simple mobile app.. Cantor is VERY new and allows all participants to be a market maker on the exchange. This results in all kinds of strike pricing both good and bad due to the proficiency levels of the traders logged in and trading at the time. They charge $0.90 per contract on winning trades ONLY so they are the most cost effective IMO. They payout 50/50 on At-The-Money expiry which is also very cool. As a new firm in the binary options space, they have a lot of catching up to do.

    Nadex, on the other hand, has a very confusing platform but offers a wide variety of products including FX, commodities and events. They have been in business longer and it shows in their professional website and educational offerings. I consider Nadex to be the platform for experienced traders only. Their liquidity is strong but that is because you are trading against IG Group (parent company of Nadex) and NOT other traders. It is much more akin to OTC trading than trading on an exchange like Cantor or the CME. Their shortest expiry is 2 hrs but ranges up to months. Nadex charges $0.90 on each side of the trade but has a max fee of $9 per side if you’re trading large contract sizes. They do not payout on At-The-Money expiry so Nadex wins both sides when this occurs.

    I hope this was useful information.

  5. #5
    Administrator Martin Kay's Avatar

  6. #6
    Active Member vmstrader's Avatar
    Hi everyone

    I think this information would be really interesting to everyone in here. You can open a new thread or maybe update your site with this

    Hope that helps

    Best regards


  7. #7
    Rookie Member nelica77's Avatar
    This is a very interesting article with a lot of information combined together!

    From it I understand that there are still only few brokers regulated by recognized institutions. TopOption and BankDeBinary have regulation by FSA as a financial institution, not as a broker! That is an important difference and we don’t have to take this regulation the same strict way as the CySec broker regulation, which also guarantee the deposits of the clients against potential default of the company.

    24Option, AnyOption and ZoneOption – three of the BOTS trusted brokers have regulation from CySec in Cyprus. LBinary and EzTrader seems also have such regulation, but this have to be confirmed from other sources.

  8. #8
    Even though binary options have gained popularity during the last few years, many investors are still hesitating to invest in this market due to concerns about the regulations and security surrounding binary options trading. This heighten sense of concern is partly due to level of trust that investors have in the financial markets. In the light of the various financial scandals and crisis that had happened since the last decade in the U.S, the most tightly regulated market in the world, investors can be faulted for being too careful. Nevertheless, a lot of the current perception in the market about binary options trading is largely due to lack of understanding how the binary option market works.

  9. #9
    Senior Member raymond09's Avatar
    I always make account on those brokers who have strong regulation policy. Because regulated brokers provide best money back guarantee and those broker can't do any cheating. Though I use only 2/3 brokers to do my trade and I don't need to move myself into others.

  10. #10
    Rookie Member xyannix's Avatar
    FYI - LBinary is not regulated. You can email SpotOption and they will confirm that LBinary is not regulated. This is as of last week!

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