When trading binary options, rational traders strive for the best possible security . Unfortunately, being one of the providers again and again rogue brokers , for example, profits do not pay off reliably or other implementation of fair methods that a disadvantage for customers is also reduced. When it comes to the question of seriousness of a broker , experts often refer to regulation . But how do you recognize a reliable môibrokerbased on regulatory relevant agency ? After all , most providers are regulated nowadays? Which is best tuning ? We want to answer these and other questions about binary options regulation in the following text. Find out what to look for when searching for a good online binary options broker and which provider you shouldn’t spend money on.
Why are brokers even regulated?
The purpose of binary options regulation is to improve traderssecurity and prevent fraud . Each broker is regulated in the country of incorporation by the competent financial supervisory authority. If multiple branches are opened in other countries , the broker usually has to register with the local financial regulator and they have to regulate it. Therefore, it is an advantage for clients if the broker they choose has a branch in their country .
A regulatory body grants the broker a license that allows him to offer legal binary options in many countries . The provision of this License Broker needs of a number of meeting requirements , for example, there is a corresponding liquidity available to moneyto clients at any time guaranteed to. Client’s funds must be kept separate from the broker’s assets kept so that they are not misused possible and even with a broker’s reliable customer return possible
A good regulation therefore provides customers with a high degree of safety and ensures that this fear is free of fraud must, but can focus entirely on trade.
Can I trade with proper regulations without fear of loss?
Not even the best regulator can eliminate all risks. Although this is the risk for a binary options scam with a good regulation significantly reduced . It is completely ruled out that a frivolous behavior may not be available to suppliers, because as in all other sectors, there is unfortunately always resourceful fraud , new vulnerabilities discovered. A fraud with a reputable regulated broker is indeed very unlikely and will also quickly attract attention and be prevented. Therefore, experts for binary options trust EU Regulatory Authorities usually and pay properly regulated brokers. In addition, it is impossible not to listen to other customers’ experiences . For a broker who has can boast of many happy regular customers for many years , suspicious behavior is much less likely than a newcomer to the industry .
However, all risks cannot be eliminated by regulation, because the nature of binary options is only “very high risk of loss”, which has nothing to do with the “seriousness of the broker”, which is due to the high arbitrage of financial products. Therefore, even with the best regulation, good risk management should not be given up if serious binary options are to be dealt with. Even for professional traders , there is always the risk of losing your entire stake at any time .
Why do so many binary options brokers choose Cyprus as their registered office?
If you look around a bit at the different binary options providers, you will quickly notice that many of them are supervised by the Cypriot CySec regulator . This is because Cyprus offers especially good conditions for online brokers, but also for their clients. Cyprus is a member of the European Union . As a result, CySec operates under the strict and uniform EU regulations , which are considered particularly secure . Here is not only the separate management of client funds and company assets, but often still an additional deposit insurance and various additional security measures to allow clients to trade binary options safe.
At the same time, Cyprus is considered the European tax haven for financial service providers. These people have to pay more tax and thus earn more profit . As a result, Cypriot brokers often have lower fees than their peers, which has a positive impact on customer profits .
Why are CySec regulated brokers no longer offering bonus promotions?
Bonus promotions are very popular with many traders , because here they can get extra credits or other bonuses. Mostly, a deposit is required for such a bonus , but there are also some bonus schemes in which the receipt of a corresponding trading volume. is linked.
As of December 2016 , brokers that are regulated by Cypriot CySec are no longer allowed to offer promotions bonus . This could initially be seen as negative , but it looks like traders will get a discount. However, the problem with almost all bonus promotions is that they encourage nonresponsive behavioral traders strategy best for this customer . In the event that a deposit bonus is offered , the customer statistically pays more money or deposits more often to receive additional bonus credits. As a bonus associated with a certain trading volume , it is likely that the client will trade more than usual to receive this reward. Bonus promotions clearly serve to encourage customers to do more . Many clients are trading beyond their own circumstances and are exposing themselves and their capital to high degree of risk .
In addition, the binary options in such offers in a bad light . Therefore, CySec decided to prohibit promotions bonus in licensing terms . At first glance, this may seem like a disadvantage for clients who no longer have the opportunity to receive special payouts to their trading account. Taking a closer look at the situation, one realized that the bonus cost had to come from somewhere. Instead of high bonuses, brokers can also reduce actual trading costs and give traders higher average profits, With the cessation of bonus promotions, this is exactly what happens when brokers compete with each other for clients and try to outdo each other with the best trading conditions . In fact, the ban on bonus offers is actually an advantage for customers , as trading conditions become more transparent and the real costs and payout percentages are easier to calculate .
What’s the problem with brokers outside the EU?
Of course, not all non-EU regulated brokers are automatically suspicious. Even abroad, there are many good suppliers , but the problem is that customers are provided with much less security with non-EU regulation . If there is a conflict between the broker and the client, the legal process is difficult and the broker can often get out of a process. Very few clients have successfully sustained minor injuries so that they would be entitled to funds in court order if the broker had not been registered in the EU. Therefore, you should only register in exceptional cases with a broker, with one being an EU resident operating less secure license. For example, this special case can be made if the provider has a excellent reputation and many years of trouble-free experience , offers significantly better conditions than brokers with other available. Such a case is really rare . The choice of EU regulated brokers is huge, so here almost every trader should find a suitable provider where he can act with maximum security and options binary clearly specified .
Why is it important for client funds to be managed on separate accounts?
The ‘clear’ separation of client assets and account balances ensures that the client’s capital is not used by the broker for its own purposes, but ‘only’ serves as a bet on binary options. Thus, it is clearly still the trader’s property , which is especially important if the broker is in financial difficulties or even filed for bankruptcy . Due to the clear segregation ofcustomermoney can be paid in these cases , because they are not the property of the broker and therefore are not insolvent assetsand therefore are creditors. A reputable broker can tell at any time the bank is managing the account with the customer’s money
What rights do I have with a reputable broker?
Reputable brokers pay attention not only to their own profits, but also to protect the client and his finances. This also includes full information about the dangers of trading in binary options. Whether the regulated binary options broker BaFin’s or other financial authority is responsible for it, according to the legal regulations trading in derivatives in Vietnam must be on the broker’s website. world and also above all the ads for this one clearly warn about the risk of loss seen in binary options. This is to ensure that the client does not mistakenly approach the trade and is well informed of the risks.
As a trader at a reputable supplier, the customer also has rights. If you feel that the broker is not paying enough attention to your rights as a trader despite legal regulations , you can turn to consumer protection or directly to the regulator. physical . Here customer claims are taken seriously and examined.
However , you do not have the right safety profit . binary options is a highly speculative business in which , despite serious regulations always lost all invested capital is imminent.
How can binary options trading be successful?
Binary options are not a safe investment for money that is set aside for other purposes or necessary for life. It is a highly speculative financial product with significant volatility in profits and losses. Even if the trader doesaccurate price analysis and observes the corresponding trading signals , it can lead to high loss and also lead to total loss of all deposit. Therefore, it is advisable to pay only so much that the total loss doesn’t have a significant impact on the client’s finances and can be easily mitigated. Also by paying bonuses maybeYou never should be encouraged to deposit more than you intended.
If you decide to trade binary options, find a broker with good trading conditions and EU safety regulations . Especially beginners should avoid brokers that are regulated exclusively outside of the European Union, as there is an increased risk here .
To find out if the broker is reputable and suitable for you personally, read the terms and conditions carefully and completely. Critics of binary options often complain that there are parts of the terms and conditions that are not allowed under EU law . Therefore, for the slightest doubt , you should wait with the subscription and discard it or choose another provider. In addition, the reviews of other customers of the broker at stake can be helpful in assessing whether a provider is trustworthy .