Binary options regulation was established around 2008/2009, when the regulators started to take steps towards investor’s protection. When binary options was in its infancy, people regarded this practice as gambling, so in a few jurisdiction like the UK, Gaming Commission regulated trade industry. However, since then there have been some changes and today regulation is made available to binary options trader.
Even though, regulation is not compulsory. Unregulated brokers can opt to get regulated or not. In addition, the regulators will determine if a specific broker is eligible for regulation or not. Getting regulation is advantageous to the broker because it displays their credibility to customers [investors]. It means regulated brokers will possibly get bulk market share in comparison to unregulated ones.
Obtaining regulation means brokerage firm gets scrutinized by the regulators and will need to stringently observe specific principles and rules in their trade procedures. Before the trading platform gets a license they will need to fulfil specific standards. Thus, the possibility of fraud and scam related to binary options reduces. Investors get great protection level, if they file disputes. Regulated brokers need separate trade accounts for each customers to gain great trust and transparency.
Is binary options a scam or an opportunity, today?
Some brokers get regulated under false address, whereas there are several who don’t get regulated. Fake stories are fabricated regarding huge profits to be made with robot. Such bad minded brokers manipulate price curves to prevent their customers from winning. If you win then they decline to pay-out and finally vanish with your money. Such stories regarding binary options are heard, which makes you wonder whether it is a scam or an opportunity.
Binary options are speculations on prices of underlying assets. You predict whether the rates will fall or rise within given time period. If you are right then broker will pay your stake money with win pay out factor within range of 75% to 95%. In case, your speculation backfires then your losses will also be intensified. Actually, you trade against broker and not the market. Obviously, broker will not wish that you win or else he will not earn profits.
Suppose, he does not manipulate price curve and even pays your wins, he is still able to control your wins with outlined pay-out factors. He will reduce pay-out figure to ensure that you lose along the road. This actually seems like a myth. Broker does not have the right to illogically reduce pay-out because there is cut-throat competition with other brokerage platform.
Why do you choose binary options?
You opt for binary options trade rather than trading serious instruments because trading cost and profits do not rely on timeframe. You can trade short term frames with binary options, which is difficult with real options.
- More customers on the brokerage platform means the broker can deal with more bets, so manipulating price curve is hard without attracting unsolicited attention
- Make test withdrawals prior depositing large funds
- Keep trade account balance small
- Research and gather information about the potential broker, especially where are they actually located?
When you make huge profits through binary options, the money comes from less fortunate traders and not the broker. Even read about binary options scam to understand how the scammers work. Binary options recovery is only possible if customers threaten credit card chargeback or harass the company immensely.