Binary options trading has been presented as a lucrative career option. Some people are having a hard time believing that binary options trading is legal. In this article, we are going to talk about that.
Binary options come with one of two payoff options: a fixed amount or nothing at all. That is why this type of trading is called binary options trading. Because there are just two options. Are binary options legal? In short, yes. But before you spend your hard-earned money on some trading website you should do your research. There are frauds out there who claim to be legitimate brokers and then steal people’s money.
How does binary trading work?
The reason binary trading is becoming more popular is because it is very easy. It all boils down to a simple yes or no. Will this asset be above a certain price at a certain time? Traders have to place a trade based on whether they think the answer is yes or no. This is why more and more traders and newcomers are becoming interested in binary trading. Because of its simplicity. But things are not as easy as it seems. Traders have to fully understand how binary options work. They have to be familiar with certain markets and products to make an educated guess. A lot of people lose money on binary trading because they are not educated about these things.
Things to remember before binary trading
Even though binary trading is legal you should always do your research before investing money. Binary option trading is regulated in some countries. Before you start binary trading check out if binary trading is legal and regulated in your country. If it is then it is safe for you to binary trade. If you are from somewhere where binary trading is not regulated but it is legal then you have your work cut out for you. You have to make sure the broker is legitimate and is offering transparent terms. Now you might ask how binary trading is regulated? Different countries have different regulations for trading binary options. Now we are going to learn about some of them.
Are binary options legal in the USA?
Binary options trading is legal in the USA. The USA has one of the most strict regulations about binary options. This makes things complex for both traders and brokers. In the US CFTC (Commodity Futures Trading Commission) is responsible for overseeing financial securities and exchanges of stocks and options. On the other hand, the SEC (Securities and Exchange Commission) is for options and future markets. Offshore brokers located outside of the US cannot have a license to operate in the US. However, there are no specific laws that prohibit traders to use offshore brokers. Therefore, US citizens can use a non-US broker.
Are binary options trading legal in the UK?
In the UK, binary options are legal for both traders and brokers. The UK is actually one of the first places where many binary brokers were first established. Due to some different regulations, brokers in the UK operate differently compared to other countries in the European Union. The laws and regulations about binary trading are quite lax in the UK. If a broker is regulated and recognized by a financial authority trusted by the British FCA (Financial Conduct Authority) then you can safely trust them.
Are binary options trading legal in Australia?
Binary options trading legal in Australia? : Binary options trading is legal in Australia. You can engage with local Australian brokers and even those that are not located in Australia. Australia is authorized by ASIC (Australian Securities and Investment Commission) and it is considered one of the most innovative regulators for leveraging the protection of retail workers. The Australian government is paving the way for a sound and clear regulatory framework that tightens the security of investors in Australia when trading binary options.
Are binary options trading legal in Japan?
Japan is one of the few countries in Asia where binary options trading is legal and regulated. Japan has two agencies that oversee exchange markets and securities. The first one is the FSA (Financial Service Agency). The second one is the SESC (Securities and Exchange Surveillance Commission). Japanese traders have access to offshore brokers. This is great because due to costly regulation processes and tight rules, brokers are limited in Japan.
Binary trading is a high-risk high reward process. In this aspect, it is kind of like gambling. Even though binary options trading is legal in a lot of countries, it is also discouraged in some countries. But a lot of traders make a lot of money because of binary trading. At the end of the day, the decision is yours.