When trading binary options, sensible traders strive for the highest possible security. Unfortunately, there are always dubious intermediaries among providers who, for example, do not reliably pay profits or use other unfair methods to penalize customers. Regarding the issue of broker seriousness, experts often refer to the regulation. However, regulators who can be found in the same jurisdiction trust brokers. After all, almost all these days are regulated? Which is the best regulator? These and other questions regarding binary options regulation will be answered in my next post. Find out what to look for when looking for a good online binary options broker and which providers you should not spend money on.
Why are brokers regulated?
By adjusting binary options, traders improve security and prevent fraud. Each broker is regulated in the country of its establishment by the respective financial supervisory authority. In case many branches are opened in different countries the broker should also generally have to be registered with the local finances with it and be regulated. Therefore, it is advantageous for clients if their chosen broker has a branch in their country.
Regulatory bodies grant brokers licenses to legally offer binary options in many countries. The broker-specific need to provide a guarantee to the customer at what time the payout will be in the liquidity available, for example, if the provision of this license meets this requirement. The broker’s assets must be kept separate from the client’s funds stored so that they cannot be misused and even with the bankruptcy of the broker can be reliably repaid to its clients.
Good regulation thus ensures a high level of safety provided to customers, which should have no fear that it is fraudulent, but allows you to focus on trading.
Can you trade with proper regulation without fear of loss?
Even the best regulators cannot eliminate all risks. In fact, the risk of binary options scams is greatly reduced with good regulation. However, as in all other fields, frivolous behavior by providers cannot be completely ruled out, as there are always tricky scammers who find new loopholes. Scams from reputable regulated brokers are actually very likely and, moreover, will also be able to stand fast and curb. Therefore, experts in trusting binary options EU regulators usually pay properly regulated brokers. Also, it doesn’t hurt to hear other customers’ experiences. For brokers who have been able to boast a large number of satisfied regular clients over the years, dubious behavior is far less likely than for newcomers to the industry.
However, regulation cannot eliminate all risk, as the very nature of binary options entails a very high risk of loss. This has nothing to do with the severity of the broker, but is due to the high variance of financial products. So, even with the best regulations, you should not give up good risk management if you have to deal with serious binary options. Even for professional traders there is always a risk of losing the entire application .
Why do so many binary options brokers choose Cyprus as their registered office?
If you look at the various providers of binary options, you will quickly see that the Cypriot regulator CySec oversees many of them. This is because the island of Cyprus offers particularly good conditions not only for online brokers, but also for their customers. Cyprus is a member state of the European Union. As a result, CySec operates under strict and uniform EU regulations and is considered particularly secure. Rather than managing customer funds and company assets separately, this usually has additional deposit insurance and many additional security measures to ensure that customers can safely trade binary options.
At the same time, Cyprus is considered a European tax haven for financial service providers. This will result in more revenue as you will have to pay additional taxes. As a result, Cyprus brokers often have lower commissions than their peers, which in turn 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 you can get extra credits or other bonuses. These bonuses usually require a deposit, but there are also several bonus programs that are tied to receiving bonuses for your trading volume.
As of December 2016, brokers regulated by Cypriot and CySec will no longer be able to offer bonus promotions. This may be considered negative at first, but it seems like traders are getting a discount. The problem with almost all bonus promotions, however, is that they encourage traders to trade behaviors that do not meet the best strategy for this client. When a deposit bonus is offered, customers statistically pay more money or deposit more often to receive additional bonus credits. This is a bonus. When tied to a certain trading volume, there is a chance that a customer will trade more than usual to receive this bonus. Bonus promotions obviously encourage customers to do more. Many clients are trading beyond their circumstances and exposing themselves and their capital to high levels of risk.
Acquire new knowledge in the learning area.
Also, the binary options in these suggestions aren’t good. CySec has decided to ban bonus promotion in its license conditions. At first glance, this may seem unfavorable to customers who no longer have the opportunity to receive special payments to their trading account. If you look more closely at the situation, you will find that the bonus cost could come from somewhere. Brokers can reduce real trading costs and give traders higher average returns in exchange for high bonuses. As bonus promotions cease, this happens when brokers compete with each other for their clients and try to outperform each other with the best trading conditions. In fact, the prohibition of bonus offers is actually beneficial to customers because the transaction conditions become transparent and the actual cost and payment ratio are easy to calculate.
What is your problem with non-EU brokers?
Of course, not all brokers without EU regulations are automatically dubious. There are many good providers abroad as well, but the problem is that customers offer much less security under 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 get out of the process. Almost blinded the success of their clients so that they can get their money The court demands if the broker is not registered in the EU. Therefore, you need to register only in exceptional cases with brokers for EU residents. Less secure license operation. This exception can be granted, for example, in the case of suppliers with him plus an excellent reputation and years of experience without incident offered much better terms than any other broker possible. Such cases are very rare. The choice of an EU regulated broker is actually great so any trader here should find the right provider from which he can operate binary options with maximum security and clear regulation.
Why is it important that customer funds are managed in separate accounts?
With a clear distinction between client assets and account balances, brokers do not use clients’ capital for their own purposes, only acting as a bet on binary options. Therefore, it remains the property of the merchant, which is especially important if the broker is experiencing financial difficulties or has to file for bankruptcy. Since the customer’s money is clearly segregated, it is possible to pay even in this situation. Because they are not the broker’s property, they are not bankrupt property and creditors. You can always indicate when a reputable intermediary bank is managing your account with your funds.
What rights does a reputable broker have?
Reputable brokers take care not only to protect their own interests, but also to protect their clients and their finances. This also includes sufficient information about the risks of binary options trading. Whether the broker Binary Options is regulated by BaFin or any other financial institution is liable, according to the legal provisions on the website of the broker and also in all advertisements for this must have a clear risk of loss warning for trading German derivatives seen in Binary Options can. This is to ensure that the customer is not mistaken in approaching the transaction and is well aware of the risks.
Customers who are traders from reputable vendors also have rights. Despite legal regulation, if you feel that a broker is not paying enough attention to your rights as a trader, you can refer them to consumer protection or direct regulators. Here, customer claims are taken seriously and verified.
However, you have no right to secure profits. Binary options are a very speculative business, despite severe regulations, there is always an imminent loss of the entire investment.
How to be successful in binary options trading?
Binary options are not a safe investment for money allocated for other purposes or needed for a lifetime. It is a very speculative financial instrument with significant changes in profits and losses. Even if a trader conducts correct price analysis and observes the corresponding trading signals, losses may be high and may result in total loss of the entire deposit. Therefore, only so much money should be paid that the total loss can be easily mitigated without significantly affecting the customer’s finances. Also possible bonus payments you should never deposit more anime than they were actually intended for.
If you decide to trade binary options and the broker you will find good trading conditions and secure EU regulation. Especially beginners should avoid brokers that are regulated exclusively outside the European Union because of the increased risk.
Read the terms and conditions carefully and completely to find out if the broker is reputable and suitable for you personally. Critics of binary options often complain that there is a section on conditions that should not be allowed under EU law. So, if you are in the slightest doubt, you should either wait for the registration and then delete it or choose another provider. Also, reviews of the broker’s other clients at risk can help you assess whether a provider is trustworthy or not.
