When trading binary options, the sensible trader tries hard enough. Unfortunately, being one of the providers again and again rogue brokers, for example, profits cannot be paid smoothly or do not implement fair methods on weaknesses. for customers is also reduced. When it comes to questions about the seriousness of brokers, experts often mention rules. But how do you identify a reliable broker based on the relevant regulators? After all, most providers are regulated these days? Which is the best adjustment? We would like to answer these and other questions about binary options rules in the following text.
Why are brokers still regulated?
The purpose of binary options regulations is to increase trader safety and prevent fraud. Each broker is regulated in the country established by the competent financial supervisory authority. If multiple branches are opened in another country, the broker usually needs to register with the local financial regulator and they need to adjust it. Therefore, it is better for customers if their chosen broker has a branch in their country.
Regulatory authorities issue brokers a license that allows them to legally provide binary options in many countries. This Broker License provision requires several meeting requests, for example, that there is appropriate liquidity to pay customers at any time is guaranteed. Client funds must be separated from the property of the broker kept so that they cannot be misused, and also with the bankruptcy of a reliable broker for the client to return.
Therefore, good rules provide customers with a high level of security and guarantee that this fear is not a true fraud, but can focus fully on trading.
Can I trade with proper rules without risk of loss?
Even the best regulatory bodies cannot eliminate all risks. Although this is the risk of binary options fraud with good rules is reduced. Completely do not exclude the possibility but frivolous behavior can not supplier, because as in all other areas, there are always bad disadvantages, new holes are discovered. Fraud with a regulated broker is highly unlikely and will immediately attract attention and be prevented. Therefore, specialists for binary options rely on EU regulators often and pay brokers accordingly. In addition, it is impossible not to listen to the experiences of other customers. For a broker that has boasted many satisfied customers over the years,
However, all risks cannot be eliminated as prescribed, because the nature of binary options only has a very high risk of loss, which is not related to the seriousness of the broker, which is due to the high spread of financial products. Therefore, even with best practices, good risk management cannot be omitted if serious binary options are operated. Even for professional traders, there is always the risk of losing the entire stock at any time.
Why do so many binary options brokers choose Cyprus as their registered office?
If you look around at different binary options providers, you will quickly find that many of them are monitored by the Cypriot regulator CySec. This is because Cyprus offers good conditions for online brokers, but also for their clients. Cyprus is a member of the European Union. Therefore, CySec operates under strict and uniform EU regulations, which are considered very secure. Not only manage client funds and company assets separately, it is often additional deposit insurance and many additional security measures to allow clients to trade binary options. safe
At the same time, Cyprus is considered a tax haven for financial service providers. These people pay additional taxes and thus earn more profits. As a result, Cypriot brokers often have lower fees than their peers, which has a positive impact on client profitability.
Why does a successful broker on CySec no longer offer bonus promotions?
Bonus Promotions are very popular with many traders, because here they can get additional credits or other bonuses. Mostly, a deposit is required for the reward, but there are also some bonus programs that receive a bonus for the corresponding trading volume connected.
As of December 2016, brokers regulated by Cypriot CySec are no longer allowed to offer bonus promotions. This was initially considered a negative, but it appears that merchants will receive a discount. However, the problem with almost all bonus promotions is that they encourage traders to trade behavior that does not meet the strategy. Best for this customer. If a deposit bonus is provided, customers statistically pay more money or deposit more often to receive additional bonus credits. As the reward is tied to a certain amount of transactions, it is likely that customers will trade more than usual to receive this reward. Bonus bonuses obviously work to encourage customers to do more.
Also, binary options in such offers are in a bad light. Therefore, CySec has decided to ban bonus promotions in the license terms. At first glance, this may seem like a disadvantage for customers who no longer have the opportunity to receive special payments to their trading accounts. Looking closely at the situation, people realize that bonus costs must come from somewhere. Instead of high bonuses, brokers can also reduce real trading costs and bring traders a higher average profit, with the suspension of bonus promotions, which will actually happen when brokers compete with each other for clients and try to outdo each other with conditions best trade.
What is the problem with brokers outside the EU?
Of course, not all brokers without EU regulations are automatically suspicious. Even abroad, there are many good suppliers, but the problem is that customers are offered less security with non-EU regulations. If there is a conflict between the broker and the client, the legal process is difficult and the broker can usually get out of the process. Very few clients have been hurt a little to receive the money required by the court if the broker is not registered in the EU. Therefore, you should only register in exceptional cases with a broker, with an EU resident who has a less secure license. For example, this special case can be made if the supplier has a very good reputation and has years of trouble-free experience, provide better terms than other brokers available. That case is really rare. The selection of brokers managed by the EU is large, so here almost every trader should find a suitable provider where he can act with maximum security and options. Binary rules are clear.
Why is it important for client funds to be managed in separate accounts?
The clear separation of client assets and account balances ensures that the client’s capital is not used by the broker for its own purposes, but only serves as a bet on binary options. Therefore, it is clearly still the property of the trader, which is very important if the broker is in financial difficulties or even files for bankruptcy. Due to the clear division of money, the client can be paid in this case, because they do not belong to the broker and therefore are not insolvent assets and therefore are creditors. A reputable broker can show at any time that the bank manages the account with the client’s money
Do I have the right to have a reputable broker?
Reputable brokers not only pay attention to their own profits, but also to protect the client and his finances. This also includes complete information about the dangers of trading in binary options. Either the binary options broker or the financial authority BaFin is responsible for it, according to the provisions of the law business in derivatives in Malaysia must be on the broker’s website. And also on all advertisements for a clear warning about the risk of loss seen in binary options. This is to ensure that customers are not confused with commercial access and are informed of the risks.
As a dealer at a reputable supplier, customers also have rights. If you feel that the broker does not pay full attention to your rights as a trader despite the law, you can turn to consumer protection or go directly to the governing body. reason. Here the customer’s accusations are taken seriously and examined.
However, you do not have a secured interest. Binary options is a very speculative business, where, despite the serious rule, the loss of all invested capital will always occur.
How is binary options trading successful?
Binary options are not a safe investment for money intended for other purposes or important for life. It is a highly speculative financial product with significant volatility in gains and losses. Even if the trader performs accurate price analysis and observes the corresponding trading signals, it can result in high losses and even result in the loss of the entire deposit. Therefore, you only have to pay a lot of money, but the total damage does not significantly affect the customer’s finances and can be easily reduced. Also by paying bonuses you should not be encouraged to deposit more money than you want.
If you decide to trade binary options, look for a broker with good trading conditions and EU security regulations. Especially beginners should avoid brokers that are exclusively regulated outside the European Union, because there is an increased risk here.
To find out if the broker is reputable and suitable for you personally, read the terms and conditions carefully and completely. Critics of binary options often complain that there are parts of the terms and conditions that are not allowed under EU law. Therefore, for the slightest doubt, you should wait with the registration and remove it or choose another provider. In addition, customer reviews of other brokers can help in assessing whether the provider is reliable.