As you seek out the best binary option brokers to work with, it is always vital to search for the services that are tightly controlled by regulatory bodies, which can help to protect your investments and avoid being taken advantage of. When a brokerage service has some degree of accountability to the laws and restrictions of a particular country, it usually means that you’ll be able to access your profits with fewer fees and restrictions and that terms will be spelled out more clearly for you before you begin to use a service.
In some countries, the brokers who are regulated by a given entity or service will have the funds of their investors covered by that entity in the event of a default or bankruptcy, which is important for investors who want peace of mind about the security and accessibility of their invested funds.
While it is easy for a broker to market themselves as being controlled by a given country’s restrictions, it is important for investors to independently verify their status as a licensed broker within that country. The best binary option brokers will be licensed either through the SEC, which licenses firms in the United States, or CySEC, which regulates brokerage services in other countries, mostly within the European Union. Recently, an additional regulatory body has arisen in Australia, known as ASIC.
As you investigate the status of a given firm, make sure that they don’t just claim to be regulated under a particular body, but that they are also licensed by that body to operate as a broker. Depending on the country in question, you can usually run a search for the license number listed by the brokerage firm to see if they do, in fact, have a license to operate within that country or internationally.
It is possible to use a firm that is not licensed to operate in your country. This is fairly common for traders in the United States, in particular, where there is only one firm that is regulated by the SEC. Many of the best binary option brokers ( please check our binary options brokers list ) will accept traders from other countries. However, you’ll want to make sure that whichever broker you use is licensed within the country that they operate within and to understand that there is a degree of risk in using a firm that is not legislatively controlled by your country of residence.