Why choosing a regulated binary options broker ?

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Every trader who enters in the trade with binary options and dares to make the right price predictions, must realise that there is always a risk of loss. Those who are fully aware of these conditions can certainly plan, which risks they can afford to take. Part of this is the insight that money should never be invested in that which dealers cannot do without in an emergency. In a way, this illustrates an aspect of safety because traders are well informed from the beginning. Yet what about the overall security which binary options brokers can offer their customers?

State regulation and deposit protection – this is what serious brokers offer you

What is important, is especially the question: How and where are my funds really being kept by the broker? At the very latest since the acute phase of the international financial and banking crisis, investors know that even supposedly good positioned banks can be in trouble. In their terms and conditions, the vast majority of brokers in the field of binary trading emphasises that customers deposits store externally on account with partner banks and are thus independent of the broker capital. These procedures are of a great importance in case a provider has economic problems and is also perhaps, heading to bankruptcy. Without the separation of the company from the trader funds, the credit of the dealers would be going in the direction of the insolvency assets.

Till what level is the customers’ money protected?

A second, important aspect which plays a role in the security theme is, the deposit insurance with which many domestic and foreign brokers compete for the favour of new customers. It also ensures that the customers’ money is protected against a possible self-inflicted failure by the broker. The deposit insurance is especially relevant, if the credit which is not separated from the broker capital is detained. How high the deposit insurance is set, primarily depends on the broker’s homeland. Depending on the broker’s residence (especially in states within the EU), legal requirements partially cater for hedging till the sum of 100,000 Euro per merchant account.

In other states like Cyprus, the limits often clearly lie below this value – for example at 20,000 Euro.
English brokers who frequently pertain to known banks, are in many cases in intra-sector deposit protection funds at the same time, so that much higher amounts are protected against failures. This statement is also applicable to some foreign brokers. As is precisely with the conditions in this regard, the traders remove the broker comparison or inquire the facts directly at the broker customer service.

The factor of regulation – if the state is keeping an eye on brokers

The most important tip on the seriousness of a broker – whether in forex, CFD or binary trading – is a state regulation. Meanwhile, more and more providers of the industry can possess licencing and regulations through a state financial and stock market supervision. Besides the British Federal Financial Supervisory Authority (BaFin) and the British Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC) from Cyprus is also considered to be strict. In the meantime, it has the reputation of checking very closely, whether its members work seriously and in the interests of its customers. Brokers usually name its licence numbers because they know about the positive effect of the state controls on potentially new customers. A guarantee of success is certainly not the regulation. Nevertheless, in so far, traders are on the safe side that authorities would not issue a licence to the black sheep of the industry.

Branches in the UK simplify the contact

Not every investor who would like to trade with binary options is fluent in English. Several brokers have particular English branches available, probably because of the economic leading position of England in the EU. (As a rule, in large cities like London). This has a double positive effect. On one hand, it is guaranteed that an English speaking support is offered. On the other hand, customers frequently have the opportunity to establish contact with a broker’s employee by an on-site visit in the branch. Still, the amount of providers with English branches could be counted on the fingers of one hand.
In respect of security, the impact of the named points are not to be underestimated. If the conditions in the implied ranges are right, a fine step is made from the trader’s point of view. Nevertheless, this does not alter the fact that investors must analyse which trading preferences they have.