Binary Options Regulations: It Protects Traders

When trading binary options, reasonable traders strive for the best possible security. Unfortunately, for example, there is always an ambiguous broker among providers who do not reliably pay for profits that cause disadvantages to their customers or use other unfair methods. Experts often refer to regulations when it comes to matters concerning the seriousness of the broker. But ultimately do regulatory authorities trust brokers that can be seen in the same jurisdiction, almost all manufacturers are regulated these days? What is the best regulator? I want to answer these and other questions about the regulation of binary options in the following article. Discover what to look for when looking for a good online binary options broker and what providers should not spend your money on.

Why are brokers regulated?

By customizing binary options, traders improve their security and prevent fraud. Each broker is regulated by the financial supervisory institution in the country of establishment. If there are many branches opening in different countries, brokers generally also need to register with the local finance and be able to regulate it. Therefore, it is beneficial for clients if the chosen broker has a branch in their country.

Regulatory agencies give brokers the license to legally offer binary options in many countries. Broker-specific needs The provision of this license meets this requirement, for example to guarantee the customer at what time the payouts will be in a responsive liquidity. Brokerage assets that should be kept separate from the client’s money can be reliably misused so that they can be held and even reliably paid back to the broker’s bankrupt clients.

Good regulation therefore requires a higher level of security to be provided to customers, but it guarantees that fear is more fraud, but can focus on the transaction.

Is it possible to trade with proper regulation without fear of loss?

Even the best regulators cannot eliminate all risks. In reality, the risk of binary options fraud is greatly reduced by good regulation. However, like all other areas, there are always difficult performers who discover new loopholes, so it is impossible to completely rule out the unpleasant behavior of presenters. Scams from reputed regulatory brokers, but in reality it is likely, and will also be able to stand and endure quickly. Therefore, specialist EU regulators on reliable binary options usually pay to properly regulated brokers. Not listening to other customers’ experiences doesn’t hurt either. For brokers who have been able to boast a large number of satisfied customers over the years, there is much less ambiguous behavior than newcomers to the industry.

However, the nature of binary options alone carries a very high risk of loss, so not all risks can be eliminated by regulation. This has nothing to do with the seriousness of the broker, but it is due to the high spread of financial instruments. Therefore, even with best practices, you should not give up good risk management when dealing with serious binary options. Even professional traders always run the risk of losing the entire app.

Why do so many binary options brokers choose Cyprus as their registration office?

Looking at the various binary options providers, you can quickly see that CySec regulator CySec oversees many of them. This is because Cyprus Island offers particularly good conditions, not only for online brokers, but also for its customers. Cyprus is a member of the European Union. As a result, CySec operates under strict and uniform EU regulations and is considered particularly secure. It does not manage client funds and company assets separately, but usually has additional deposit insurance and many assets; additional security measures that enable customers to trade binary options safely.

At the same time, Cyprus is considered a European tax haven for financial service providers. It will have to pay more taxes, so you have to earn more money. As a result, the Cypriot brokers often have a lower commission than their peers, which in turn has a positive influence on the customer profit.

Why does CySec Regulatory Broker no longer offer bonus promotions?

Bonus promotions are very popular with many merchants. You can get extra credits or other bonuses here. These bonuses usually require a deposit, but there are also some bonus programs related to receiving bonuses for that volume.

From December 2016, brokers regulated by the Cypriot CySec will no longer be able to offer bonus promotions. This may be seen as a negative at first, but the trader appears to be getting a discount. The problem with almost all bonus promotions is that they encourage traders to trade behavior that does not fit the best strategy for this client. If a deposit bonus is available, customers will statistically pay more or deposit more often to receive additional bonus credits. If you are tied to a certain volume, chances are your customers will trade more than usual to receive this bonus. Bonus promotions definitely encourage customers to do more. Many clients overstate their situations and expose themselves and their capital to high levels of risk.

 

 

The binary options in these suggestions are also bad. CySec decided to ban bonus promotions under license conditions. At first glance, this may seem disadvantageous to customers who no longer have the opportunity to receive special payments in their trading account. If you take a closer look at the situation, it appears that the bonus cost can come from somewhere. Brokers can lower the actual trading costs instead of higher bonuses and give traders higher average returns, as bonus promotions are interrupted, this happens when brokers compete with each other for customers and try to outdo each other with the best trading conditions. The ban on bonus offers is indeed in favor of the customer, as the trading conditions are transparent and the actual costs and payment rates are easy to calculate.

What is the problem with non-EU brokers?

Of course, not all brokers without EU regulations are automatically ambiguous. There are many good providers abroad, but the problem is that customers offer much less security in accordance with non-EU regulations. If there is a conflict between the broker and the client, the legal process is very difficult and the broker can often leave the process. If the demanding broker of the court, who almost crushed the success of the client, is not registered in the EU, they can be paid. Therefore, you should only register with a broker for EU residents in exceptional cases; less secure license operation. For those and providers, this exception is, for example, an excellent reputation and years of accident-free experience that can be granted plus many more conditions than other brokers have offered. It is very rare. The choice of EU regulatory brokers is indeed such that every trader here is able to work with the greatest security and clear binary options for regulation that he should find in a large suitable provider.

Why is it important that customer funds are managed in a separate account?

By clearly separating the client’s assets from the account balances, the broker does not use the client’s capital for his own purposes and only acts as a bet on the binary options. Therefore, it remains the property of a dealer and is especially important if the broker experiences financial problems or has to file for bankruptcy. Since the customer’s money is clearly separated from each other, you can pay even in these situations. Since they are not the property of the broker, they are not the bankruptcy property and creditors. You can always indicate when a reputable brokerage bank manages your account with customer funds.

What rights do well-known brokers have?

Reputable brokers take care not only to protect their own interests, but also to protect their clients and their finances. It contains sufficient information about the risks associated with trading binary options. Broker Binary Options Whether the regulations of BaFin or other financial institutions are responsible, the legal provisions must be present on the website of the broker, and also in all advertisements for this, as seen in the clear risk of loss warning for binary options for German derivatives you can. This is just to make sure that customers do not get it wrong: they approach transactions knowing the risks well.

Customers who are merchants with trusted vendors also have rights. If you believe that despite legal regulation, a broker is not paying enough attention to your rights as a trader, you can refer to consumer protection or directly to the regulator. The claims of the customer here are taken seriously and confirmed.

However, you do not have the right to make a profit. Binary options are very speculative in the business, despite serious regulations, there is always a loss on the overall investment.

How can trading in binary options succeed?

Binary options are not a safe investment in money that is allocated for other purposes or needed for life. These are very speculative financial products with significant changes in profits and losses. Even if the trader performs the correct price analysis and observes the corresponding trading signal, the loss can be huge and result in the total deposit. Therefore, you have to pay too much money, so that the total loss can be easily reduced without significantly affecting the customer’s finances. Also possible bonus payments where you never have to deposit animation more than they actually intended.

If you decide to trade binary options, brokers find good trading conditions and EU regulations for security. Beginners in particular should avoid brokers that are regulated exclusively outside the European Union due to the increased risk.

Read the terms of use carefully and thoroughly to find out if your broker is reliable and personally suitable. Critics of binary options often complain that there are sections on conditions that should not be allowed under EU law. So if in doubt, wait for registration and remove or choose another provider. In addition, an overview of other customers in the broker at risk can help determine whether the provider can be trusted.