Regulated Versus Unregulated Brokers: Is There Really a Difference?
Regulated Versus Unregulated Brokers: Is There Really a Difference?November 21, 2013
Recently we have been witnessing a flood of new brokers entering the binary options scene. Some of which have even opted to select strange names for themselves like Bee Options or Planet Option, all of these are eventually destined to become regulated or extinct. The reasons for this vary, but it’s becoming more difficult to accept credit card transactions, particularly from the United States.
Certain brokers that have risen to the challenge and decided to get a license from CySec or MiFid, have absorbed significant costs related to obtaining the actual license, conforming to regulatory norms, and finally actually paying traders as stipulated in their terms and conditions section. If they don’t conform to these norms they risk losing their license and all the privileges associated with it.
Owning a license means you basically have a much easier time recruiting advertisers, since they know there is some degree of auditing being conducted by an authority entity. Generally speaking, one will find the regulated brokers advertising in European or Non-US sites, since they are restricted to certain markets.
The unregulated brokers will usually advertise in English-only sites, unless it is a niche broker designed primarily to target a specific market. The unregulated brands will also have diverging payment policies and have been known to withhold funds from traders who have qualified to withdraw their winnings. This is of particular concern for American traders who will now be subject to more stringent SEC policies starting January 2014, where binary options is expected to formally declare binary options trading as gambling, and I can’t see anyone investing $20 Million in obtaining a gambling license in the USA.
So if you are a US trader, you will need to consider Nadex or the CBOE since these are the two futures exchanges offering binary options and bull spreads trading. Other than that the regulated brokers I am aware of that also offer a great service and payout traders are Anyoption, Top Option, and Optionweb, although the latter is a bit smaller (but that is not always a disadvantage). There are other such as Banc De Swiss or Banc De Binary, however BBinary has had its share of legal entanglements and CEO Oren Laurent has been deemed a scamming criminal by the SEC where preliminary injunctions have been set in place against him and the broker he is associated with. So, while its true that this broker has become regulated and most likely changed some policies, there are so many options available out there today so you can be as picky as you want and select the cleanest broker.
If you are a US trader, you would need to let the market forces do the work for you, but essentially I can only recommend two brands that actually accept and payout US traders, those would be Traderush and Redwood Options. GTOptions also pay out, however they are sticklers when it comes to dotting the T’s and the I’s the first time, but after that it’s easy sailing. As for the rest, some are good and some are bad, but I can only recommend the three above at this point since I have traded and cashed out my money in all cases.