What is a regulated broker actually?
A regulated binary option broker is a broker with a license. Authorities issue licenses to those brokers that are willing to run their business according to a strict set of rules. It provides the trader for example with transparency and above all a level of assurance.
Do you profit from trading with a regulated broker?
In first you should know that many regulated brokers are obligated to educate their traders. Education is always good. Secondly, your money is safe due to the fact that the broker is obligated to open a segregated account. This will ensure your investment being split from the company’s account and so, abuse of your investment is impossible.
When a broker is regulated, their work is monitored by the authority by which they became regulated. This proves that more brokers are working more authentic. When becoming regulated they have to sign a statement which obligates them to be transparent towards the authority and their clients.
Please note that if you would feel that you have not been treated correctly by your broker, you can always complain at the authority where the broker is regulated. In the past we have seen numerous cases where for example CYsec (European covering and regulated organ located in Cyprus) gave fines of €100.000 to the broker involved in that specific matter. It is your full right to complain but make sure you come prepared and build a strong case against your broker. Additionally, complains may also result in the broker even losing his license and thus, losing its credibility.
The fact that a broker is not regulated does not mean that they are a scam. I know great brokers that are not regulated but provide amazing service and overall are working with passion and honesty.
Due to the fact that regulation for brokers is still considered to be pretty new, you may understand that numerous brokers are in the process of becoming regulated. Before receiving a license although brokers are monitored for a while in order to enable the authority to conclude that the broker in matter is safe to trade with. Possible existing complaints are being checked as well during that period. Whilst regulation is already known in many countries, other countries are still working on creating them in order to prevent fraud and scams.
Taking the financial crisis and scams in advance, a trader can’t be careful enough these days but a lot of opinions about the binary option trading field are wrong due to the lack of understanding regarding how the whole sector works. Nevertheless, there are enough brokers getting themselves a $5000 license from for example New Zealand. Why? To be regulated is providing trust and safety to your clients and believe us, its worth even buying such licenses as they are fundamental when it comes to advertising.
When it comes to the more sophisticated kinds of regulations the regulation is not simply given for a couple of thousands of dollar but the broker is being monitored. There are quiet some procedures they have to go through such as depositing large funds of money in the CYsec its account (traders protection). In addition, they need to make sure that the money of the clients will be deposited only in a segregated bank account so your money is safe no matter what might happen to the company. Upon becoming regulated, the company also needs to set up an office in the country where the regulation comes from. These offices a regularly checked by employees from the authority providing the regulation.
Is your broker manipulating the trading conditions offered to you or obstructing you from making fair trades? I a world so loaded with competition the greed of brokers is many times what bring them to a point in which they are trading against the rules. They manipulate prices and simply obstruct you from fair trading.
Please note that you should always keep an eye on broker reviews on the net. Also internet sites providing news in the fx or binary option markets can be a good resource. Being alert with binary option trading is not only something you should do when actual trading takes place but it starts already from the moment you even consider starting trading.