Why binary options trader needs to know about binary options regulation. Simply because he knows which broker to choose to avoid future problems. It is also one of few most discussed topics by traders in binary options niche. Slowly, people around the world are recognizing the benfits of binary options but still for most people, it is shady and blurry. The exponential growth of brokers on one side and information given to potential customers does no good for the industry and the brokers aswell. Therefore it is not surprising that people are confused when they want information that would be clear. That is why we need to go over binary options regulation.
WHAT YOU WILL LEARN:
- What is regulation?
- Why is regulation needed?
- How it is with regulation in binary options?
To make it more clear, regulation for now is an advantage and definitely not a must. If we take a look at bigger brother of binary options, forex industry. It took years to establish the regulations and same is here. Nothing comes over night but if you are in the right trend, it can make you some great profit although its normal to be suspicious of something new. Today, we can already start seeing few regulated binary options brokers and more will come.
WHY IS REGULATION NEEDED?
For those of you who do not know what regulation is we have to first know that does not mean some company who is not regulated is doing illegal business. But if they are regulated it is better since certain rules are there to apply such for safeguarding. So the main reason to regulate is just to make sure the company is doing their business by the law and to protect this same company from other companies who are not regulated.
Rules and regulations are also here for some people who forget what is fair and the rest must apply to them now. They are essential part of everything even to modern society to make sure of safety of those who are involved directly. For traders it is needed to protect them from abusing and to mantain standards that are safe, to avoid frauds. In positive world this just ensures better service to go forward.
REGULATIONS IN BINARY OPTIONS
Since this industry is relatively new and fresh it needs to adjust first. For example if we check on few examples such as United Kingdom where binary options are considered gaming while in others it is considered gambling. It was the same with forex trading before regulation came in. Why this happens is because every country has different legal deffinitons, even if we talk about the same industry. Most strict is US market, following Europe and then Asia.
Most of companies are located as you saw in tax shelter countries such as Cyprus. Reason for that is, they have low to none taxes and also regulations that are processed in Cyprus are affecting all Europe which is good. On the other hand, it will take some more time that regulation comes to United States and trading binary options will be more safe and available to everyone.
If you see a broker and it is not regulated, it does not mean it is a fraud! It is only advantage which should be taken by every binary options broker at the end since that means that the money traders depost is in safe place and is monitored by third party, so everything is fair.
To conclude all this, it is better for you as a trader to work with a binary options broker which is regulated. Since it simply means that you will sleep better at nights because you will know that your money is at safer place.