Binary options trade is recognized as legitimate business in the US, unlike in some countries where options traders engage in business within an unregulated market. In countries like Canada, for example, nobody can cite a statute on binary trading as investment business, yet the government does not proactively clamp down on the trade. In fact, binary options brokers are easy to come by in Canada, as they even advertise their trade online and elsewhere. Probably what the government appreciates is the fact that anyone interested in binary trading can always get binary options online and proceed to transact.
What Binary Options, Really, Are
For anyone who has no inkling how to trade in binary options, it is an easy thing to learn, although it helps to identify the best binary options broker in your neighborhood. Binary options trading is about choosing a yes or no answer when the question relates to whether the price of the asset underlying the binary option will be either above or below a certain stated price. There is no room for rounding figures either upwards or downwards, and the investor has to be on point in order to reap the full benefits of binary trading.
A sample question could be if a given company’s stock price will be above $10.27 at 2.45pm of a given day. That stock price is specific to the cent, and the time is specific to the minute. Of course, the date in question is clearly mentioned. Some people argue that knowledge of the market does not help in answering such questions accurately, and for that reason they view binary option trading as a gambling exercise. In fact, it is much the reason some countries have not legalized binary trading as a business to be carried out under the stock exchange. Some countries choose to license binary options brokers under the law governing gambling.
The Options Oversight Body
In the US, credible binary options brokers operate under the regulations of the Commodity Futures Trading Commission (CFTC). As such, it is important to check out binary options brokers who have been licensed accordingly. The regulations under CFTC are there to protect both the investors and the binary trading brokers, as arbitration is relatively easy where there is an official regulating body.
Of course, a duly licensed binary options broker is also bound to make the necessary statutory returns, and so such binary traders do not defraud the government of tax revenues. Regulations under CFTC have been responsible for rendering credibility, for example, to NADEX, the famous US based exchange known for facilitating trading in binary options.
How Many Binary Options Brokers Operate In The US?
There is a significant number of binary option brokers licensed in the US, and even some of them take up business from beyond the US. What this means is that the binary options trade has capacity to earn the country foreign exchange, because investors from Canada and elsewhere working with US binary options brokers have to submit their respective currencies for exchange with the US dollar. Clearly the binary trading sector has been growing since it began in 2008. At the time, there were only ten binary options brokers; but today, the number has risen to beyond four hundred.
What makes that a good thing? Well, in business, competition is healthy and very beneficial to the consumer, in this case, the person investing in binary options. In the post 2008 years, the US binary trading arena has seen brokers offering more favorable terms to their clients, including big bonuses. Many have also begun to offer basic free tuition in binary trading.