Binary option traders will always choose to trade with a regulated binary option broker as oppose to an unregulated broker.
The reason traders choose regulated binary option brokers is because they are looking for an honest broker who will not co-mingle funds from their account with the firms money. A regulated broker ensures that a trader can withdraw their funds from their trading account.
Regulated binary option brokers tend to have a better reputation than unlicensed brokers. In the event that a regulated broker declares bankruptcy, the traders funds are usually protected by the investors fund. For brokers regulated by CySEC, a trader can verify the brokers license here. Traders with complaints about a CySEC regulated broker can submit their complaint to CySEC here.
Brokers in Australia are licensed and regulated by ASIC. The most prestigious license for a binary options broker is from ASIC.Traders in the United States will not find a European licensed broker that accepts them.
Australia Regulated Binary Option Brokers
The highly respected government regulatory agency ASIC in Australia, is now regulating binary option brokers for Australian traders.
Investors looking for automated trading binary options robot, that uses licensed brokers should try out Binary Robot Plus.
CySEC Regulated Binary Option Brokers
BDSwiss (full review) is a CySEC licensed broker that offers both binary options and Forex trading. They operate on the SpotOption platform for binary options and the MetaTrader4 platform for Forex and CFD, see here.
Other Licensed Brokers
Financial Regulators in Europe are members of the MiFID, which means that a broker who is registered at the FCA in the United Kingdom, is recognized as a authorized financial service provider by BaFIN in Germany and the CONSOB in Italy.
European regulators recognize binary option brokers as financial services organizations and they must be regulated by their countries regulator. The Cyprus Securities and Exchange Commission is the most widely recognized regulator of binary option brokers. As many brokers are regulated in Cyprus by CySEC this allows them to operate in all European Union member countries. Learn about binary option brokers licensed in Europe here.
Recently, some unregulated brokers have started including this line on their site. “Binary Options are the simplest way to trade the market. They have been available since 2008, and have become regulated in Europe by CySEC in May, 2012.”
This does not mean that the broker is regulated by CySEC. It means that CySEC happens to be a regulator but they do not have a license. A trader should look for a 5 digit CySEC license number and then go to CySEC’s website and verify that the license is still valid.
American investors who are looking for a legal CFTC regulated broker should, read this.