Is Binary Options Trading Legitimate?

NYSE, NADEX, CBOE And Other Legal Regulated Trading Exchanges

Let us clear up the matter of whether trading binary options in the US is legal at all.Not only is it legal, but there are actually several officially regulated binary options sites which are operated by exchanges located in the USA. They were approved beginning in 2007-2008 by the Options Clearing Corporation and the Securities and Exchange Commission. These legally regulated websites include the American Stock Exchange (Amex), the North American Derivatives Exchange (Nadex), and the Chicago Board Options Exchange (CBOE). So that right there clears up the muddy question of whether trading binary options is legal in the USA at all. It is.


If you are getting into trading, one government agency you should know about is the US Commodity Futures Trading Commission, or CFTC. The CFTC works closely with the National Futures Association (NFA) to regulate trading activities. At this point in time however you are not going to find any offshore brokers who are regulated with the CFTC. There are brokers who are working on becoming regulated with the CFTC, but right now regulations are simply not all that clearly defined, and since the groundwork is still being laid, most offshore brokers are not regulated in the US or any other country as binary options brokers.

That said, some offshore brokers are regulated in their respective countries, but generally under laws which govern other types of financial entities, such as casinos or private banks. This provides a level of protection, even though it is not specific to trading activities. If an offshore broker claims it is regulated with the CFTC, you should be very suspicious. In time, some of these claims may be factual, but right now, they are not.

You can search for any business in the directory on the CFTC website and confirm for yourself whether or not that business is regulated by the CFTC. Brokers that dodge questions about regulations usually are not regulated at all. There is really no reason not to be up-front about it, since it does not by itself indicate a lack of good faith. So if a broker refuses to answer your questions about regulation, you should probably avoid them, since they may be feeling guilty about the way they’ve been treating their customers. If a broker admits to you upfront that they are not regulated, that actually indicates more trustworthiness since it is honest and forthright.

Is Binary Options Trading a Scam?

Binary options are not a scam. That is not to say that some traders have not been scammed, because they have. If you deal with shady binary options brokers it is likely you will be scammed at some point in time. You are bound to find some articles on prominent website, like Forbes, claiming that binary options trading is a scam. Is this true or not?

There are legitimate concerns about binary options trading. However these are things you can navigate around if you are not in a hurry and you are willing to take a little time to make sure you’re on the right track. The dangers of binary options trading include:

  • Inherent risk in trading
  • Unregulated (for the most part) market that is still “young”
  • Untrustworthy brokers have tarnished the image of the legit binary options brokers.
  • Bad trading decisions and just bad luck.

You can legitimately trade binary options by depositing money at one of our top binary brokers where you know that you will be given a fair trade and paid any money you earn. Avoiding the bad and unreputable brokers first is a question of reading reviews and making intelligent decisions about where you invest your money. If you are reading up on binary options brokers on our website, you’re already well on your way to choosing a trustworthy broker. I have reviewed literally hundreds of different binary options brokers and have found that most of them indeed are not very good, and some are downright scary. But there are a number of trustworthy brokers, and some of them are excellent. Those top-shelf brokers are the ones I recommend here on this website.

Is Binary Options Trading Gambling?

To gamble means to try and achieve an outcome or a result on the basis of pure luck or on the basis of chance. At its heart, trading binary options online can easily be mistaken as a form of gambling. You are risking money by predicting an outcome. 

However, despite the similarities, binary options are not considered gambling by most. As such, any successful trading is considering earnings and not winnings and therefore any money earned is usually taxable. We advise anyone considering trading in binary options online to seek advice from an accountant in order to ensure that these earning are claimed by the end of the taxable year.

One of the main reasons it considered earnings rather than winnings, is because of the skill involved in trading. You could, if you wish, ‘bet’ on binary options blind and guess the outcome. That’s your choice. Buts there are plenty of financial tools available to help the astute trader make informed decisions so you minimise risks or at least choose the level of risk comfortable to you. It’s up to you to do to the research and choose whether to gamble or trade.

Binary options trading is not supposed to be an exercising in gambling, but if you carry out bad practices in the binary options market, then what you are doing is sheer gambling and not trading. Perhaps the worst trading practice which constitutes gambling in the binary options market is trading without analysis. Traders must download interactive charts from trading platforms in the commodity or forex markets and use same for analysis. Lack of any recognised mode of analysis is simply guesswork and is an exercise in gambling.

Again we have to point out that binary options trading is not roulette. In roulette there are no ways whatsoever to increase your winning odds. However, in this type of financial betting you make your own success. – If you watch news, if you like business and if you’re smart, then you’re definitely able to generate consistent winnings in financial trading.

The best binary options winning strategies are build on knowledge. Watch the news, know what’s going on and you’ll be able to generate consistent profits. Almost every single major event that’s happening globally has an influence on markets.

You don’t even have to be an economist with a degree to see a connection between things. Everyone with some basic common sense can predict the movement of an asset. The secret is to pay attention to the signs.

Is Binary Options Trading the best home based business ever?

Its a matter of opinion. Many persons are leaving MLM and flocking to options binary trading. Thousands of persons are finding out about binary options and generating a part time or full time income from trading from the comfort of their home. The benefits that binary options trading provide are many and include:

  1. Low start up cost - as little as $20 one time with some brokers like IQ Options.
  2. There is no limit as to how much you can earn
  3. No selling, recruiting or promoting required - ever
  4. You are in control - your success depends almost entirely on you
  5. Quick returns - you can be in profit in less than one week
  6. Flexible hours - The options binary market is open 24 hours, 6 days a week, so you can trade and make money whenever you choose to.
  7. There is a blueprint to follow. There are already many successful trading strategies. You just have to choose one and implement it
  8. Its very hard to fail since our broker allow you to practice your trading strategy with a demo account  without risking any of your real money. You only trade real money when you are confident and ready.
  9. The stock market is expected to be around forever, so no fear that your home based business will go out of business.

10. Speedy withdrawal of earnings - within 24 to 48 hours with the best option brokers.

How do I get a free binary options demo account?

What brokers offer you the chance to demo test binary options? Here are some of our favorite picks:

  • HighLow. Demo test with $10,000 in virtual funds  without making a deposit.
  • IQ Options. This broker offers a $1000 demo account without making a deposit.

How to Demo Trade Risk Free? – You can minimize your risk by only depositing the minimum and refusing any bonuses. That way you can withdraw without having to first trade a certain volume. Our advice is to touch base with customer support prior to making your first deposit and let them know you are considering depositing but you want to refuse any bonuses and have full access to your own demo trading account. If you are willing to make the initial deposit that shows the broker good faith that you are serious about possibly trading with them and not just wasting their time and resources playing around and never deciding to become a real client.

Should I accept the bonus from my binary options broker?

There is no right or wrong answer here. Bonuses are legitimate offers that can bring value to your trading, but they can also result in monetary loss, and it can happen a lot faster than you think. You should make your decision about accepting a bonus based purely on what you are comfortable with. Maybe a bonus is an exciting offer to you because you want to experience the thrill of having all that money on the line and the possibility of instantly winning it big or losing it all. But maybe you are more of a conservative trader, and you want to only trade a very specific percentage of your account on each trade. In that case, a bonus would only interfere with your money management plan.

Almost all match bonuses are leverage-based bonuses and not cash bonuses. The money will be deposited into your account but kept separate from your main funds. It is available to trade with but not to withdraw and use as you see fit. You will have to achieve a certain turnover of trading volume (usually around 30x) before the money converts to cash. In the meantime, it adds leverage to your trading, because you are trading a larger volume of money than you actually have.

Leverage is often called a double-edged sword because it has the power to make or break you. With leverage on your side, you can control more money than you have, which means you can trade as though you have already won the amount of money included in the bonus. But what if you start losing trades with leverage? Then it’s like you are losing money you do not have. That will not come out of the bonus you have not yet received as cash; it will come straight out of your own trading balance. Trading with a bonus can blow your account if you do not know what you are doing.

You can choose not to accept a bonus at most broker websites and still trade with the broker. If you have questions about how bonuses work, start by reviewing the bonus terms and conditions (sometimes located in the same file as the other terms of service, sometimes located in a separate document). You can also get in touch with customer service if you still do not fully understand how bonuses work.

Which Binary options broker is really the best?

Searching for the best binary options broker can be a challenge if you don’t know where to start or how to steer clear of the scams. We have conducted a lot of research on binary options brokers and have put together a list of the websites which impressed us the most in terms of features, accessibility, and customer service.

Click here and you'll find a toplist of the best binary options brokers that we created after evaluating multiple criteria that included aspects such as the quality of services, past history of the broker, number of assets available, types of contracts offered, legality of services and much more. All these binary option brokers offer demo trading accounts.

Can you really succeed with Binary Options Trading?

“Wait a second – I can start out trading with as little as $100? I thought I had to be rich to trade.”

That is one of the beautiful things about the online binary options brokers. They have leveled the playing field for the retail, average trader who wants to risk a few hundred bucks and start out small. You can literally start out for as little as $100. However, it is advised to start out with around a $500 initial investment if you are new and just starting out. This gives you enough capital to trade small and learn to manage your trading bankroll. Being surprised that you can start with so little money is a common reaction to binary options trading among new traders who have never participated in any market before. “Retail trading” refers to individuals who trade for themselves to make money, rather than trading for a business or investment firm. Retail trading used to be very inaccessible, but since the advent of online technology, it has become a very common phenomena, and it is only continuing to grow. A few years ago, Forex was the most popular investment vehicle for retail traders. Nowadays it’s binary options.

So yes, you can get started with as little as $100 and no prior experience. If you understood the example above, you are theoretically ready to trade binary options. Can you trade them successfully, though? That is another question altogether. Binary options traders usually fall under two categories: gamblers and serious traders. Which do you want to be? There is no “right” answer here. You may be interested in binary options trading for fun, or you may be hoping to trade for a living. What is most important is you know what you hope to get out of the market, and that you take a responsible approach to getting what you want.