Binary options brokers USA
Binary options traders from the US face special legal issues. Legally, only brokers that are registered with the two government institutions that license and regulate online financial trading in the USA: The Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), are allowed to offer financial services to American traders.
So far, no brokers have registered with these authorities – except for one U.S. based binary options exchange, Nadex (sign up here or read our thorough review). There are also international brokers that accept U.S. traders, but these brokers are rare and leave you in a legal gray area – nobody will sue you if you trade with these brokers, but you are also incapable of suing these brokers if there is a problem with your money.
In this guide, Binary options brokers USA, we will help you to make sense of this legal situation by answering these questions:
- Which legal issues do U.S. binary options traders have to consider?
- Which broker is perfect for U.S. binary options traders?
- Which brokers from overseas accept U.S. traders?
With the answers to these questions, you will be able to start your trading career with a broker that is both legal and highly profitable for you. We will take a look at the special requirements U.S. traders should consider when choosing a broker, a broker that accept U.S. customers, and you will learn which brokers offer the best service for U.S. traders.
Binary options brokers USA: Which legal issues do U.S. binary options traders have to consider?
The legal issues that U.S. binary options traders face can seem confusing but are really simple. The fact of the matter is that the United States government has created two institutions that are supposed to provide U.S. investors with the legal structures that control financial institutes and guarantee the safety of their money. These two institutions are the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).
Unfortunately, most binary options brokers shy away from cooperating with these institutes. Since most binary options brokers are based outside of the U.S., there is no legally binding reason for them to accept U.S. regulation. Regulation would, however, mean additional rules to follow, and no broker likes someone else telling them what to do.
Legally, this leaves U.S. traders in a grey area. Strictly speaking, non-regulated brokers are forbidden from offering their ser vice to U.S. traders. On the other hand, nobody can prevent U.S. traders from signing up with a non-regulated broker. You decide with whom you want to do your business, and nobody can prevent you from sending your money overseas.
If you choose to register with a broker that is not regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), however, you surrender the legal support of these institutions, and often all legal support. If a broker from the other side of the world treats you unfairly, who is there to help you?
That does not mean that all non-U.S.-regulated brokers are untrustworthy. In fact, the overwhelming majority of binary options brokers offer trustworthy businesses.
How to identify a good broker?
Many brokers are regulated by the Cyprian Securities and Exchange Commission (CySEC), which enforces the European Union’s strict regulations. These brokers are just as trustworthy as brokers that are regulated by the American authorities.
The problem with this brokers is that if there ever should be an issue, what are you going to do? Assume, for example, that you think the broker owes you $250. You already wrote the customer support, and they said that you are mistaken. What are you going to do? Are you really going to go to Europe and sue this broker in a legal system with another language and laws you are unfamiliar with? Probably not.
While the odds are slim that you will ever have such a problem with a broker that is regulated by the European Union, it can never hurt to have the full support of the American legal system if there should be a problem. Only U.S.-regulated brokers can provide you with this peace of mind.
The important point to take away from this article is that the legal situation is not black or white. We recommend American traders to stick with U.S. regulated brokers, but if you are determined to sign up with a broker from overseas or have found the perfect trading environment in a European broker, there is nobody that can stop you, and it might even make sense to sign up with this broker.