Is Trading Binary Options The Same World Over?

No, trading binary options are not the same the world over. The legal and regulatory aspects applicable for the binary options trading process varies across the globe. For traders from a specific nationality, the binary options investment process is lawful and convenient. However, there are a few nations where the process is considered unlawful, making the process complicated or inconvenient for the traders.

Judicial Outlook

Since binary options are comparatively new financial derivatives in the trading world, the legal status accorded to this form of investment varies between countries. However, most of the regulations are imposed on the brokers rather than the traders and it is possible for traders to participate in the trading process literally from any country. However, when we check in to the terms and conditions pages of most of these platforms, there is a declarative warning in the web pages that require the traders to verify the legality of the trading process as applicable in their jurisdiction. It is indeed kind of tricky.

Regulatory Bodies

When dealing with the decision making process of whether to trade or not, the choice obviously narrows down to dealing with trading platforms and brokers who are governed by regulatory bodies authorized by your jurisdiction. Again, there are different regulatory bodies and not all regulatory bodies are accepted by all jurisdictions. A bit of homework is required before you ultimately decide to sign up with the site.

The major regulatory bodies for the binary options trading process are:

  • CFTC – Commodities Futures Trading Commission in USA
  • CySec – Cyprus Securities and Exchange Commission in Europe
  • FSA – Financial Service Authority in UK
  • ASIC – Australian Securities and Investments Commission in Australia
  • DIFC – Dubai International Finance Center in United Arab Emirates
  • FFMS – Federal Financial Markets Service in Russia

In most cases, it will be seen that the brokers have obtained licenses from the government bodies that control their financial activities. This in turn enables the brokers to prove their integrity to their clients who are to invest money with them.

Ultimately, it is about the security of the money being invested. If you are able to invest and not withdraw your returns, that is indeed a messy situation – you do not want to get in to legal issues in your jurisdiction. You should be paying taxes on the profits you thus make. Lot of financial stuff involved in the process and you should research in to “what rules your right to trade” in the country where you live and you should decide accordingly.