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Best Binary Options Trading Brokers for 2020
Below you will find a list of Binary Options Brokers that offer various binary contracts for trading. Although the term may appear to be very confusing, it’s not that complicated. A binary option is a sort of a contract with a value, expiration date and determined conditions of winning. By purchasing it, you technically make a bet. Most common wager is to predict whether the asset’s price will go up or down from a certain level and stay there until the option expires. Most tradable assets are currencies, indices and some commodities. There used to be much more brokers offering binary options, but many regulatory authorities placed restrictions and prohibited that kind of trading.
Binary options for the retail market were instituted in 2008 when the first description of this product was approved by the US Securities and Exchange Commission. The initial description of what is now known as US-style binary options was based on assets that were listed on exchanges, with traders pitting their bets against each other.
A short while later, a different model of binary options was developed and introduced to the world by brokers based in Europe and Israel. This model (European-style binary options) was essentially based on off-exchange trading of CFDs. However, what followed was years of unwholesome practices and remarkable scandals, which led to the shutdown of the industry in Israel by regulators there, and in the UK and EU region by the European Securities and Markets Authority (ESMA).
The industry is presently undergoing a self-cleansing, and we now have offshore brokers who are showing better commitment at playing by the rules and ensuring their clients get a good deal for their money.
What led to the near collapse of the binary options market?
The answer lies in only one direction: shady brokers and their agents all over the globe. But perhaps some portion of the blame can go to regulators, who were generally very slow in rising up to the occasion to protect the clients, whose money constituted the entire financial backbone of the market.
Brokers are meant to create markets for their clients to trade and are supposed to ensure transparency and safety of trading venues, while maintaining some level of neutrality. However, what occurred between 2020 and 2020 was a situation where a lacuna in regulation led to the emergence of fraudulent entities. These fly-by-night operators set up “brokerages” that were essentially criminal enterprises, specifically designed to rob traders of their hard earned cash. These scam brokers devised several means of ripping off their unsuspecting customers.
A) A common method was the use of call center agents, who unscrupulously obtained contacts of prospective traders and literally harassed them into making ever-increasing deposits, with promises of helping them reap bountiful returns on their investments.
B) There was also the use of volume requirements for incentive bonuses, which were tied to the ability to make withdrawals. Traders soon found out that achieving these volume requirements was practically impossible, thus ending any opportunity at retrieving capital or profits made.
C) In some brazen instances, agents in the brokerage house would access trader accounts from the back end, and execute trades that had been deliberately configured to lose on those accounts. There is at least one case known to the writer where $5,000 was stolen in this manner. Prosecutors and law enforcement agents presently have warrants on the identified personalities behind that brokerage.
Perhaps the case that brought binary options into very negative light, prompting calls for an EU-wide ban, was the unfortunate case of a Canadian investor who lost his life savings after patronizing a shady brokerage entity. The eventual suicide of this investor was the breaking point; EU and UK regulators took action and shut down binary options in Europe and the UK.
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It is not only traders that suffered from the criminal activities of the scam brokers. Legitimate brokers such as Binary.com paid a very heavy price, as they lost a significant amount of the market share in an industry where they could be said to be the pioneers. Binary.com (which is listed below as one of the best binary options brokers of repute today) and several other legitimate companies around the world were forced to make major changes to their operational models, in an attempt to improve transparency and to bring back badly eroded investor confidence into the market.
Some of the changes which have been introduced include:
A) Restriction on issuance of bonuses, a lot of which is now provided as cashback for volume trading.
B) Robust trader education, in order to ensure that only informed traders use the binary options platforms.
C) Provision of demo accounts, which many of the defunct brokers never provided for their clients. No longer will traders be deprived of the opportunity to test their strategies and learn the process using virtual accounts.
D) Enhancement of the analytical tools on the platforms, to replace the archaic methods of the old order which provided traders with only line charts and zero tools for analysis!
E) Elimination of confusing binary options bet types and sticking to the classical binary options.
F) Getting their entities regulated in the countries of operation, to enhance user protection and boost broker accountability to enforcing regulatory institutions.
G) Incorporating new asset classes (e.g. cryptocurrencies) to the mix.
Criteria used in broker selection
In selecting the binary options brokers displayed in our list below, the following parameters were used in the process of consideration and selection to ensure that only the most genuine brokers are available for you. We have thus made the process simple, knowing that it is quite a challenge for traders to be able to select these brokers on their own.
The issue of regulation cannot be emphasized enough. The only way traders are going to be protected is by regulating the binary options providers they operate with. Anything short of this will be inviting the old demons back. Regulation also provides for greater accountability and ensures that investor confidence is never lacking in the market.
2) Corporate Governance Structure
A look was taken at the structure with which the listed brokerages operate. Many of them have been around for more than 9 years, and have invested in improving their platforms and trade offerings. These brokerages also have properly defined corporate hierarchy and a face to which the company can be tied to. For instance, the CEO of Binary.com is well known. Olymptrade has a very active presence in an online forum in Africa. Brokerages like Go Markets have officials who are also well known. There are no faceless companies in our list.
3) Openness and Reachability
The brokers listed here all have verifiable contact addresses and can be reached by phone, email and social media channels. Compare this with the old order where some brokerage operations were essentially husband/wife run establishments, operating out of a kitchen (yes, a “binary options broker” was found to be just that several years ago).
4) Trade Conditions
The trade conditions for each broker were also reviewed. For instance, we looked at factors such as stability of the platform, uptimes and downtimes, accessibility of customer support, latency of price and data feeds as well as how the brokers handled counterparty risks. Brokers that were found wanting were eliminated from the list.
Can European Brokers Association change binary options industry?
At US Binary Options our financial analysts have selected the top trusted US regulated binary platforms in 2020 and the best stock options brokers.
From 2020, we compare and provide professional reviews on all binary trading platforms in order to help you choose the broker that suits you best.
Check out our top Binary options brokers comparison table to find a trusted platform, and also our platform blacklist with scam brokers to avoid.
Read our guide about binary options trading for beginners as well as few basic binary strategies that you should take into consideration.
What are Binary Options?
These are a new kind of investment. What you will do is speculate on which way you think the asset will go in, or the direction it will go in. What you used to do was you have to purchase the asset now that no longer has to happen. When the platform is used to purchase a binary option the contract that is made enables the buyer to buy an asset which is underlying and at a price that is fixed and with a time frame that is fixed and specified with the seller.
Are there other Names for Binaries?
All or nothing options are also another name for binaries and are digital options + Fixed Return Options or FRO’s. Each of their names stresses the nature of the binary option. When it comes to outcomes there is always two possible results and this is something that the investor will be aware of before they purchase the option. The following is an example:
- Binary option for Microsoft is purchased at $100
- At the end of the day their shares will be much higher than they were when purchased
- So 71% is the return offered on this investment
This is a particular category of option where a person would be able to get either all or nothing when there comes to talk about the payout. This thing makes binary options easier a lot to know as well as makes the trading process with them trouble free than the previous traditional options.
These options are like this;
- They can only be traded until they expire
- Once these are expired, they would surely be settled for the customer in already specified amount (in dollars)
- If the trade expires and it is out of the money then this means that the buyer gets nothing
So now you can see why binary options can either enable you to gain which is the upside or you end up with a loss which is the downside, there is always a risk when it comes to binary option trading. If you were trading in the traditional way then things would be different.
All or Nothing
When it comes down to the platform you are using for trading.
- Nothing can mean something
- Even it happens; at the time of expiration, the proprietor of the particular option could be given a payout yet when there is no money in their hands.
Binary options can also be found under other names including:
- Exchange Market
- Digital Options
Other things to Learn
Before you decide to start trading there are a few things that you should research first including:
- Learn the outcome options
- Decide your position
- Learn how the price is determined
- Learn the advantages of binary and traditional options
- Learn where binary options are traded
- Check the implicit transaction costs of binary options
Are Binary Brokers legal in the US?
Regarding regulation for the offshore binary options brokers, we can affirm that some binary options brokers are already regulated in the European Union ( CySEC ), but not yet in United States.
Since 2006 US binary options have been in America but they have only just started to become popular since the middle of 2008. This has happened; traders and brokers have started popping up from many different states all over the US, what has happened is that people are now wanting to start a career in binary options trading and the one thing that is on every ones lip is:
Now when it comes to binary options are divided into two levels and these are:
- US regulated exchange platforms by CFTC, where americans can trade binary options legally: NADEX and CANTOR EXCHANGE.
- Offshore brokers not regulated.
The OCC or the Options Clearing Corporation in 2007 ruled that binary platforms would become legal then in 2008 the SEC or the Securities and Exchange Commission approved binary options and listed them as cash or nothing security. Then the American Stock Exchange or Amex and the Chicago Board Operations or the CBOE also listed binary options with exactly the same name. Then NADEX or the North American Derivatives Exchange added to its trading platforms binary options. But one thing has been done and that is a restriction has been imposed:
- Americans are free to trade with binary options as long as the broker they are using is legitimate
- The broker has to have a legal business in the county it is in and has to have followed and processed the procedures for it to operate
- Also, they must not have been banned by the federal government for transacting with US citizens in this business
Regulation In The United States
Now just because something is legal it does not mean that it is regulated.
- Legal means that it is protected
- Regulated means that it is not protected
Well US binary options brokers are regulated and over the years binary regulations are becoming more and more stringent. It is the OCC that has made a point of making these regulations harder and also making sure that binary option sold by brokers have the right securities. Rules regarding trading have now been put in place and traders and brokers are expected to abide by them, if they don’t and they violate the rules then either or both trader or broker can end up being banned for long periods of time.
These have also been set for things such as indices and how many can be listed, this gives better control to the trading that is going on in the market. Scams have also started to rear their ugly heads when it comes to USA binary option trading too. Some of these scams have been very malicious and ended up causing some traders to lose thousands of dollars. But because of the SEC and the US Department of Justice have taken legal action very quickly against the crooks by doing things such as:
- Freezing their bank accounts
- Putting them behind bars
the traders that were scammed were able to get some of their deposits even though it is not the entire amount back, the federal government has been able to enforce justice when it is needed and making broker who was involved in the scams accountable for what they did wrong. This is now why there has been a hard-core regulation within the United States and they will keep on doing so until the binary options market is strong and reliable in America.
Binary Options Trading in the USA
The hysteria as to trading with binaries on the USA financial market keeps increasing, because more and more people based in the States are showing an interest in this field. With such growth in popularity, many new binary options trading platform have appeared on the market, but, still, people tend to have doubts about them. The fact that there are so many doubts as to binary options USA brokers so, we have decided to make this subject clearer and to provide some helpful information. By reading it, you can finally decide for yourself whether to trade with binary options brokers based in USA, or not. And to make this reading more interesting for you, we will tell you now – you can trust these trading websites and you should not have any concerns about them.
The History Behind Binary Options Brokers USA
The very first thing we need to tell you that in the beginning, trading with binary options, while being based in USA, was indeed illegal. USA financial authorities used to ban this field of having fun and earning extra cash. The reason was that the old American laws pointed trading with binaries as a form of gambling and you must be already aware that games of chance was strictly forbidden and even punished. However, over the last few years, the American laws have passed through several changes and currently, it is not illegal to trade in binaries with USA brokers. What you have to look for, though, is a good and reliable website that has an official license for operating on the market and that has found an agency to cover its security. Thankfully, after the changes we have mentioned, there are now official controlling bodies in USA, which are in charge of the binary options USA brokers.
Who Is In Charge of Binary Options USA Trading Websites?
The following two agencies are currently responsible for the safety regulation in binary options trading brokers. Find out more about these authorities in order to get more confident as to trading with binaries in USA:
|Broker||Early Expire||Average Return||Min Deposit||Min Trade||Rating||More|
|✔||90%||$ 10||$ 1||★★★★★|
|✔||95%||$ 10||$ 1||★★★★★|
|×||95%||$ 250||$ 1||★★★★★|
|×||85%||$ 10||$ 1||★★★|