What are Regulated Binary Options Brokers? Why Choose Regulated Binary Options Brokers? Top 3 Best Regulated Binary Options Brokers
What are Regulated Binary Options Brokers?
The chances are that if you are looking to understand what regulated binary brokers are, you probably already understand a few about binary options brokers. For the sake of those who stumbled upon this article, and have never heard about binary options trading before, here is a quick explanation.
Binary options trading is a form of online trading, where you can only lose your whole investment or profit with a predetermined margin. Conventional stocks or forex trading usually involve fluctuating values. You can never tell how much you will profit or lose until the trade is over. Binary options brokers are the enablers of this trader. They make the trading assets available for you to trade.
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My Recommended Regulated Brokers
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Back to regulated binary options brokers. There are many binary options brokers operating in different countries around the world. The brokers handle their clients’ funds, and hundreds or thousands of transactions. A lot of funds exchange hands within these platforms. Such circumstances require the parties involved, especially the brokers to be of high discipline. So, who regulates binary options brokers? In a bid to avoid dubious undertakings and scams, there are regulatory bodies in various countries that govern the operations of binary options brokers. Regulated binary options brokers are those brokers under the regulation of such authorities depending on the countries in which they operate. We compiled one of the best regulated binary options brokers reviews. This guide aims at leading you to the best regulated binary options brokers.
Different countries have different laws and regulations concerning binary options trading. Some countries even allow unregulated binary options brokers to operate. It is always advisable to trade with regulated binary options brokers. We will expound more on why you should only trade with regulated binary options brokers. Below is a list of countries where most of the binary options brokers available operate from;
Each country has a different set of regulations concerning binary trading. Among the most respected countries regarding binary options trading regulations are the USA, the UK, and Cyprus. Let’s take a quick look at the regulatory bodies in these countries.
Cyprus boasts of binary options traders that have the largest numbers of subscribers. Their laws and regulations are a bit flexible, and they allow many people from different countries around the world to trade on these platforms. Their regulations are quite effective too. Cyprus has some of the most trustworthy binary options traders in the worlds.
Cyprus was the first country to recognize binary options as a financial instrument, allowing many brokerage firms to sprout. CySec (Cyprus Securities and Exchange Commission) is Cyprus’s body that regulates the firms operating in Cyprus. It is a respected regulation authority around the world. CySec laws and regulations are aligned to those of the EU allowing many traders from all over Europe to get involved. The laws and regulations are quite different from those in the USA though! This makes it difficult for USA residents to engage on brokerage platforms from Cyprus. A majority of the binary options brokers from Cyprus, if not all, do not admit traders from the US. Brokerage firms can still operate in Cyprus with licensing from CySec. However, clients will always prefer a regulated binary options broker.
The USA has the strictest laws and regulations as far as binary options trading is concerned. In fact, very few binary options brokers from overseas can afford to engage traders who are residents in the USA. Binary options trading is part of the US Financial markets and is under the regulations of CFTC (Commodity Features Trading Commission) and the U.S SEC. (Securities exchange commissions). These bodies are mandated with licensing binary options brokers in the US. Many of the binary options traders operating in the US are based in the US. The regulatory bodies insist on being able to monitor and audit their operations constantly.
Majority of the offshore binary options brokers that operate in the US are from the UK. USA’s regulatory bodies have the means to monitor the binary options brokers in the UK. Brokers operating in the USA are seen as the most secure and reliable binary trading brokers.
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The UK takes pride in being the source of binary options brokers. Many of the first binary options brokerage companies were started in the UK in the early 1990s. UK’s laws and regulations concerning binary options trading have been quite different from those in other countries for some time. The UK has for long allowed free interaction between its residents and binary options brokers. The regulations have since changed though. Just like in the USA, the UK laws and regulations have become strict, and brokerage firms are required to be licensed and regulated by the FCA (Financial Conduct Authority). The authority also constantly monitors and audits the brokerage firms.
The similarity in the UK’s laws and regulations on binary options trading and those in the USA has made it fairly easy for UK’s brokerage firms to admit USA’s resident traders. UK’s brokerage firms are currently some of the most respected around the world. They also command a good share of the market. They admit clients from many countries around the world. Brokerage firms also subscribe to the regulations of authorities in other countries, so that they can be attractive to traders in that country.
So, why is it important to have the binary brokers regulated? Why do countries such as the UK and USA have strict regulations concerning binary options brokers? Why is important that you trade only with regulated binary options brokers? Let’s find solutions to these queries.
Why Choose Regulated Binary Options Brokers?
The main reason why you should only choose regulated binary options brokers is so that you don’t get duped. Whenever you fund an account on a binary options broker’s platform, you are entrusting them to handle your money for you. Therefore, it is important that there are watchdog authorities that ensure the brokers handle your money right. Let’s get into the nitty-gritty of how binary options brokers handle trader’s money, and how the regulation authorities protect you from getting scammed.
My Recommended Regulated Brokers
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Binary Option Brokers Operations
The reason binary options brokers are in operation is that many people do not have the capital to trade in the stock or forex markets directly. They give traders with small amounts of capital access to the markets.
They combine identical trades from different traders (since only binary options are involved there is a bulk of identical trades) and the amounts stakes and put execute the trade on the main market. They, therefore, trade on the main market on your behalf. You need to be sure that they will put up your trade the way you put it, and they will use your money for exactly that purpose.
The other form of engagement is where the binary options brokers buy the binary options from the main market, and you buy the options from them in turn. In both instances, the flow of funds is similar.
So why should you have confidence in the fact the binary options traders are regulated? How does the regulation protect you?
First, a regulated binary options broker indicates that the broker has the best interests of the traders. It indicates that they want you to profit from the trade. It is important to note that binary options traders can profit in both ways. They can profit if you lose or win.
Regulated brokers have to keep their client’s assets independent of their company’s assets. They cannot use your assets to trade on the market if you have not initiated any trade. This means whatever happens to the company, the trader’s money remains intact.
For the binary options to be licensed by the regulatory bodies, they need to show proof and guarantee that they have the adequate financial capital needed to run their trading operations smoothly. The trades you make, start immediately you confirm. The broker, therefore, needs to have enough funds ready to cater to the clients on their platform.
Governments across the world are beginning to appreciate the binary options trading is a legitimate investment channel. They also know it is very easy for traders to be duped. There are two main reasons why government authorities are choosing to regulated binary trading brokers.
One, as already mentioned, need to ensure that clients are offered legitimate services by the brokers, and the brokers handle client’s money responsibly.
As with any other investments, there are profits and losses. You all know the government wants tax everywhere there is any profit. The regulation allows the government to cash in on the profits made, more so by the binary options brokers.
At this juncture, it should be pretty clear to you why you should only go for regulated binary options brokers. You are always at your own discretion to choose whichever broker you want to work with. You will lose nothing by choosing a regulated broker though. Also, note that there are binary options brokers that claim to be regulated in weird jurisdictions. Some of these jurisdictions have no proper systems in place to regulate the brokers. The most reputable and trustworthy jurisdictions are those from the countries mentioned above. It is prudent to stay away from binary options brokers claiming to be regulated by jurisdictions that have a history of money laundering, and tax evasion havens.
So, you have finally decided that you need to trade with a regulated binary options broker. Right?
If you follow the guidelines above, you will find a lot of available brokers. You will most likely be left confused concerning the broker you should choose. Apart from regulation, there are a few other factors you should consider before settling on any binary options broker.
Maximum payouts – different brokers offer different profit percentages when you win a trade. Higher percentages are always attractive. However, take time to explore other services offered by the broker. Some brokers will have low payout percentages but will offer you great resources that can help you win trades.
Minimum deposit – different brokers require different amounts of initial deposit to issue you with an account. Obviously, you can only work with the broker whose minimum deposit you can meet.
Below are three reputable binary options brokers that you could consider trading with.
Best Regulated Binary Options Brokers
You will find a long binary options brokers list if you go searching for some. Which binary options brokers are regulated? Which ones are trusted binary options brokers? There are many different binary option regulators that control trustworthy brokers. You could go for binary options brokers regulated by asic or binary options brokers regulated by cftc. binary options brokers who are regulated with the cftc are usually those looking to operate in the US. We shall look at binary options brokers regulated by cysec and binary options brokers regulated by fca since they are the most popular currently.
My Recommended Regulated Brokers
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IQ Option is one of the best, if not the best, binary options brokers. The Seychelles-based broker operates under the regulation of CySec. As we have already established CySec is also a reputable and respected regulation authority. IQ Option was launched in 2020 and has seen consistent growth since then. Consistent growth in an indication of satisfied traders and high winning rate. IQ Option has over 25 million subscribers as at now.
IQ Option trading platform offers you up to 77 assets to trade with. They offer three types of accounts on their platform. The accounts are;
DEMO account- this is a virtual account that is offered to a new member on the platform so that they can learn how to trade. Binary options trading is available to everyone. It is prudent to start here if you have no idea about what binary trading is.
REAL account – This account gives you access to the real market. The account attracts a minimum deposit of $10. The account offers a cash back option of up to 45% too. You also have access to the web brokers trading competitions. A deposit of $100 and above will earn you free trading signals, and you also get access to more trading opportunities.
VIP account – this account attracts a minimum deposit of $3000. The account offers you unlimited access to trading opportunities. IQ Option will also give you a dedicated account manager and trading insights from their resident analyst. The account also offers refunds of up to 60% when you make wrong predictions.
The minimum deposit on IQ Option is $10 for a real account or $3000 for a premium account
The minimum investment is $1
The maximum returns are 95% profit on your stake
IQ Option offers no bonuses.
IQ Option operates a proprietary web, and Android and iPhone platforms
IQ Option is recognized by many players as one of the best binary options brokers 2020. It is also one of the best binary options brokers with low minimum deposit, and one the best binary options brokers regulated by CySec.
Raceoption is a UK-based binary options broker. It is subject to the laws and regulations of the FCA (Financial Conduct Authority). UK regulations have gotten tighter in recent years. Raceoption has stood out as one of the most compliant binary options brokers. The company has managed to get itself in the USA market too. That’s a strong point for any binary options broker. Raceoption has been operating since 2020 and has 1570 subscribers as of now. It boasts of average trader earnings of 1217 per month.
Raceoption offers you over 100 assets to trade with. They offer three types of trading accounts too. The trading accounts are.
Bronze account- this trading account attracts a minimum deposit of $250. The account’s privileges include; demo account, copy trading tool, 1-hour withdrawal, 24/7 live support, and a bonus of 20%.
Silver account – this trading account attracts a minimum deposit of $1000. The account comes with all the privileges in the bronze account plus a master class training, up to 50% in bonuses, a dedicated account manager, and first three risk-free trades.
Gold account – this account attracts a minimum deposit of $3000. The account comes with all the privileges of the silver account plus, up to 100% in bonuses and integrated technical analysis.
Raceoption has one of the best binary trading sites. The sites are user-friendly and very responsive. Raceoption is one of the best binary options brokers regulated by FCA. It is one of the best binary options brokers uk. It is also one of the best us regulated binary options brokers.
Raceoption offers up to 90% profit on the stake in payoffs.
Binarymate is yet another reputable UK-based binary options trader. It is also under the regulation of the FCA (Financial Conduct Authority). It is also regulated and licensed by CySec. Binarymate is another one of the few binary options brokers that admit US traders. Binarymate is a recent entrant into the binary options scene. It has managed to gather 5372 subscribers in a short while. Binarymate is best binary options brokers for beginners. It offers a wide array of educational resources to help you learn.
Binarymate offers over 100 assets for you to trade with. They offer three types of trading accounts too. The trading accounts are;
Bronze- this account attracts a minimum deposit of $250. You are also offered up to 20% bonus on your deposit.
Silver- this account attracts a minimum deposit of $1000. You are offered up to 50% bonus on your deposit.
Gold- this is the ultimate trading account on Binarymate. It attracts a minimum deposit of $3000. The account offers you either a bonus of $250 or risk-free trades.
You can choose to start with a demo account if you are a green beginner. You might not want to invest your money before you have learned the ropes of engaging on the Binarymate platform. Below are a few advantages to the Binarymate platform.
Steller customer support 24/7 live video chat support
1-hour withdrawals processing time
Secure trading, and ample data protection
Binarymate pays maximum returns of up to 90% profit on the stake. The broker allows US traders on its platform. It is one of the best binary options brokers us.
These are three legit binary option brokers that you can choose to trade with. Other binary trading reviews will suggest different brokers depending on their findings. Trading binary option 2020 is one of the ways of making money online in 2020. It is not straightforward or easy though.
Admiral Markets Group consists of the following firms:
Admiral Markets Cyprus Ltd
Admiral Markets Pty Ltd
Admiral Markets UK Ltd
Reading time: 12 minutes
Forex scalping can be very exciting for traders. The promise of “free” cash with a good scalping strategy can make a trader’s head spin and their fingers very trigger happy (by which traders start taking many trades). However, no Forex scalping strategy can be effective without understanding the size of the spread and how to exploit the advantage of low spreads. This article will address questions such as ‘What is a spread in Forex?’, ‘What is scalping in Forex?’, and ‘Why are low spreads important?’. We’ll also cover two key strategies for scalping pairs that have their spreads lowered.
What is the Trading Spread in Forex?
In Forex trading, the ‘spread’ refers to the difference between the Buy (or Bid) and Sell (or Ask) price of a currency pair. For instance, if the EUR/USD Bid price is 1.16909, and the Ask price is 1.16919, the spread is 1 pip. If the Bid price is 1.16909 and the Ask price is 1.16949, the spread would be 4 pips. When trading Forex, a trader makes a profit based on the movement of the currency pair. However, the trade only becomes profitable once the currency price has crossed the spread.
So, if the currency pair has a 1 pip spread, in a Long trade, the value of the currency would need to increase by at least 2 pips before the trader would profit (1 pip for the spread, and an extra pip for the profit). The wider the spread, the longer it will take for any trade to become profitable. So if we compare EUR/USD with a 0.6 pip spread to a high-spread pair like AUD/NZD (which is typically 6-10 pip, though the typical spread at Admiral Markets is just 3.1 pips),* the EUR/USD currency pair wouldn’t need to move as far as the AUD/NZD currency paid in order for a trade to become profitable.
What is Scalping in Forex?
Scalping in the Forex market involves taking advantage of minor price changes in the market, by making many small trades over very short time periods – usually between 1 and 15 minutes. For a 1 minute trade, a trader would look to make a 5 pip profit, while a 5 minute scalp would aim for a 10 pip profit.
Because these trades are so small, the importance of choosing low-spread currency pairs is clear – if a spread is too large, there will be no profit left over once the trade ends. Because the focus is on such small trades, this is a very popular trading style for many traders, as it creates many opportunities within a single day.
Our Top Low Spread Scalping Strategies
When it comes to taking advantage of low spreads, Forex scalping strategies provide many opportunities for traders. An FX currency pair may move 25 pips long or short for a minute, then pull back 10 pips the next minute, oscillate at this level for another 5 minutes, and make another strong 25 pip move over the next ten minutes.
This is usually a minor move in the Forex market, occurring over a matter of minutes, and this is what you, the scalper, are after. But first, let’s discuss why it is so important to get educated on scalping. Of course, scalping wouldn’t be nearly as popular if it didn’t provide benefits, mainly:
The possibility to achieve a greater level of profit than you can by merely making positional trades.
No waiting around for a strong trend to develop.
Many trading opportunities.
No pressure to analyse the overall market.
On the other hand, scalping also has some disadvantages, including:
A lower margin for mistakes.
Too many ‘good’ trades leading to overconfidence.
It can be exhausting at times.
There is a risk of overtrading.
A greater level of loss.
Strategy Number One – Extreme Scalping
Timeframe: 1 min
Pairs traded: EUR/USD, GBP/USD, USD/JPY, USD/CAD
Wait for the 3 EMA to cross up through from the 18 Bollinger Bands middle line
Wait for the Relative Strength Index and MACD Histogram to line up above 0 on the MACD, and above 50 on RSI.
Wait for the 3 EMA to cross down through the 18 Bollinger Bands middle line
Wait for the Relative Strength Index and MACD Histogram to line up below 0 on MACD and below 50 on RSI.
Place the stop-loss for long trade a few pips below lower band
Place the stop-loss for sell a few pips above upper band.
Place profit target on opposite band
Average target is 5-15 pips.
Strategy Number Two – Gold CFD Trading Strategy
For this strategy it is strongly recommended to download and use the MT4 Supreme Edition, as it incorporates the Admiral Pivot indicator that is used in this strategy.
Exponential Moving Average (5), close
Exponential Moving Average (10), close
Stochastic Oscillator (8,3,3)
Relative Strength Index (14) with 50 level.
Commodity CFD trading: GOLD
The price should be at or very close to the Admiral Pivot support (S1, S2, S3) or slightly above the Pivot Point (PP)
Wait for the 5 EMA to cross above 10 EMA
The Stochastic should have recently crossed 20 from below
The RSI should be above 50.
The price should be at or very close to the Admiral Pivot resistance (R1,R2,R3) or slightly below the Pivot Point (PP)
Wait for the 5 EMA to cross below 10 EMA
Stochastic should have recently crossed 80 from above
The RSI should be below 50.
Place the stop-loss for long trade below previous support
Place the stop-loss for sell trade above previous resistance.
Place the profit target close to the next pivot.
Source: MetaTrader 4 Gold. Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.
When taking long trades, it is always best to see that stochastics have just crossed above 20 from below.
When taking short trades, it is always best to see that stochastics have just crossed below 80 from above.
Using ‘Profit Stop’ is advised after a trade has gone into profits.
Download MT4 Supreme edition
Use ‘VPS’ (Volatility Protection Settings)
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Key Considerations for Low Spread Trading
When using low spreads as a part of their trading strategy, it’s important for traders to keep the following factors in mind:
ATR is the indicator that measures the volatility of a financial instrument. It also projects high and low range based on its calculation. The higher the ATR, the higher the volatility. For instance, if the AUD/NZD moved 60 pips a day while the EUR/USD moved 90-120 pips a day, the EUR/USD would have a higher ATR.
When it comes to low-spread trading, while higher volatility can compensate for a wide spread, the ideal scenario is one where the volatility is high while the spread is low. To go back to the previous example, if the AUD/NZD moved 60 pips a day, and you paid a 6-pip spread, the total trading profit would be based on 54 pips. By contrast, if the EUR/USD moved 100 pips and had a one pip spread, the profit would be calculated based on 99 pips.
Stop-loss vs. stop grab
Source: MetaTrader 4 GBP/USD. Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.
You also need to consider what happens when your stop-loss gets hit on those high spread pairs. You are paying a huge spread when your ‘market order’ stop-loss order hits the market. That might create a pattern that collects all stops above or below it. The more stops that are hit, the stronger the move of the price is going to be. This might even push the price to the next support or resistance level, creating a fake out, caused by a stop grabber.
In financial terms, correlation is the numerical measure of the relationship between two variables. The range of the correlation coefficient is between -1 and +1. A correlation of +1 denotes that the two currency pairs will flow in the same direction. A correlation of -1 indicates that the two currency pairs will move in the opposite directions, 100% of the time. Meanwhile, a correlation of zero denotes that the relationship between the currency pairs is completely arbitrary.
So in the chart above, you can see that EUR/GBP and GBP/USD are negatively correlated (-98). This means that they move in a completely opposite direction. If you compare the current ATR of EUR/GBP(70) to ATR of GBP/USD(128), it is very easy to see which pair to trade. Moreover, the spread on EUR/GBP is 2.5 pips, while GBP/USD has a spread of 1.4 pips.Occasionally you’ll see that brokers change the spread and allow you to trade with extremely low costs, so make sure to look out for them!
The trader’s account should be in a better position to handle setups with larger drawdowns before problems with margins hit the radar. Traders are, therefore, less limited in terms of the number of trades. This can be particularly useful when the market accelerates in its price action, and it suddenly offers the trader more opportunities to trade.
The spread fluctuation might also depend on market factor, namely, liquidity. A market that is liquid means that it has many trades on a daily basis, and is composed of many active traders. The Forex market is extremely liquid because hundreds of banks and millions of individuals trade currencies on it every day. The spread is then divided by the average daily range of a currency pair. This gives us a percentage which tells us more precisely how much the spread costs. The lower the number, the better it is.
The spread can be considered an opportunity cost in the sense that it might reduce the amount of profit gained from the daily range calculated by ATR. The higher this opportunity cost, the more likely it is to convert to losing trades and, subsequently, real financial losses. In the table below are some examples using current average spreads* and ATR (the lower, the better).
* MT4 average spreads as of January 26 2020
Typical Spread Value : 1.0 pips
Spread as a percentage of ATR: 1.0/87 = 1.14 %
Low Spread No Commission
Foreign exchange is the world’s largest financial market. It is the individual investor and not the major financial corporation which has made this market what it is today. But these investors come up against high spreads making it difficult for trading and investment. Low spread no commission forex is one of the rising trends that brokers and traders often provide.
Doing away with market making:
This is one of the largest allegations which have come up against numerous freelance brokers. Offering traders or investors with spreads which are quite divergent from the actual market price is a common practice to these brokers. There are two conclusive situations which come to be:
Often, these spreads are conclusive to an investor loss with the broker pocketing his share irrespective of the transaction.
Spreads are more often than not on the higher side thus making a profit from trading a very improbable proposition.
What these spreads and brokers do is make a market scenario themselves; affixing different buy and sell prices with the help of a liquidity provider such as a bank or similar financial institutions. This artificial market has its separate existence over the actual market with its own set of prices.
An Alternative Scenario:
Instead of a trader and a broker being the medium for placing an order of the market, there’s always that possibility of placing orders directly on the market. This is where Electronic Communications Network and STPs (Straight Through Processing) come in.
A scenario where a single broker provides for live market prices of a pair with a bank in the fray, i.e. with whom the currency is being exchanged with is what occurs on a daily basis. A low spread no commission forex is where everything is the same except for what follows:
Multiple investors registering to the same broker via an Electronic Communication Network i. This broker only places and executes orders and is not in control of bid-ask prices which are set by a software application live with the market. Lower spreads are thus viable.
STP allowing for live market quotes to be directly applied to trading. Spreads are pre-ordained, and basically, an investor is trading with a bank itself the broker being only a mediator.
Getting a Low spread no commission forex broker:
Lower the spreads, higher the probability of eking out a profit from a trade. Further, there are brokerage and trading services which have forex no spread commission too. That is to say, a trader/investor can buy and sell at the live market price quotes. But in reality, this rarely happens as no broker provides for trades without exacting their brokerage from it.
Truth be told, these accounts with zero spread or commission are mostly available when hot-lining or trading directly through banks. And more often than not, the order placed is not the one executed, and by the time it is, that order itself is a small re-quote. That re-quote is a spread earned by that bank.
Thus, low spread no commission forex is a realistic way of trading. Subscribing with a broker registered to a n Electronic Communication Network i s the most profitable way forward. Invest with these brokers to maximise chances of your profit.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.
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