You have surely read all the negative coverage of the binary options brokers who are offshore scam operations.
But what about real binary options trading for serious investors, which brokers are they using?
American Vs. European Binary Options Brokers
In the United States there is no such thing as trading against the broker. America requires brokers to process orders via an exchange in an open and fair market.
The largest and most popular place for trading binary options in America is at the North American Derivatives Exchange aka Nadex. At Nadex.com, which looks like a typical stock brokers trading platform, your orders are processed on an open exchange, and they work with multiple market makers just like the Nasdaq and CBOE.
You should take a few minutes to look at a more details Review of Nadex.
In Europe and countries like Australia, South Africa and the United Kingdom, a broker can take the opposing side of the trade. This is very common place with Forex dealers. That is why you will sometimes see brokers who advertise that they are an ECN and not a broker dealer.
With binary options, the broker is officially just sending your orders to a separate company that is the market maker, but they receive commissions from the market makers profit. That is why they do not charge you trade commissions. It is also the way that the broker makes money.
This does not alter the fact that there are regulations in place by CySEC, ASIC, FSB, and other regulator agencies to ensure that the brokers are operating in a fair manner.
When you are dealing with large binary options brokers like ETX Capital for example; which is a licensed Forex broker in London and also licensed in South Africa. They will not give you the typical high pressure sales pitch you get from the boiler room bucket shops who are operating out of Bulgaria and the Marshall Islands.
Regulated Binary Options Brokers
The easiest way to know that the binary options broker is an honest company is by verifying that they are licensed.
Below is a list of brokers that are licensed by a governments financial regulatory authority.
If your broker is not on this list, then there is a good chance that they are a fake broker.
|24Option||Tech Financials||Cyprus CySEC Europe|
|365 Trading||Proprietary||Cyprus CySEC Europe|
|Nadex||Proprietary||United States CFTC|
|ETX Capital||Markets Pulse||FCA United Kingdom & FSB|
|BDSwiss||SpotOption||Cyprus CySEC Europe|
|HighLow||Markets Pulse||ASIC Australia|