Binary Options Regulation

The Pro and Con of Binary Options Regulation

Although binary option trading is deemed as simple and easy with many investors venturing into it today, there are various regulations to keep the trading option in check against fraud and scams. However, imposing strict regulations on binary options trading can turn many investors away as certain authorities try to protect other markets. This leads to a veil of uncertainty shrouded around binary options trading in the market which shuns investors.

The strict trading regulations imposed by certain quarters on trading markets, especially with binary options trading makes it difficult for the option to be preferred by investors and traders. The restrictions on trading and various regulations imposed on binary options trading came about from the uncertainty of certain authorities with regards to this new trading platform.

Legitimate Investment

One binary options regulation is that authorized binary options brokers should be engaged in any trading activity to protect the market and involved parties just as it is with forex trading. Normal trading is permitted through approved and licensed brokers in the market to avoid frauds and scams. This trading path helps control the market activity to keep the market buoyant and controlled.

With this binary options regulation in place, there is an approved status on this trading option to make it a legitimate investment. This may place binary options trading in a better light for investors and traders to venture into it. Global traders are allowed to trade in the forex markets via this new trading platform as long as they operate through a licensed broker. This opens the gateway of global markets to all investors across the earth to trade legally in binary options.

Shortcomings

However, the current shortage of licensed and approved binary options brokers in the market is creating a situation for investors and traders. It is difficult to execute binary options trading without registering with a licensed binary options brokerage. The current trading facilities are insufficient to ease the growing investor demands and requirements.

This type of binary options regulation imposed by the US authorities is limiting the expansion of binary options trading in the US while other brokers across the globe have not imposed such restrictions to trade freely. Thus, global brokers enjoy a global clientele that includes US investors and traders. This situation benefits non-US brokers to offer a wider range of trading products as they are not subject to the strict US binary options regulation.