The Regulation of an Option

The Regulation of an Option

We all worry about the security of our finances and doubly more so when we are investing our hand earned cash. It is no secret that Binary Options have endured a lot of negative press since its launch less than 10 years ago. The reasons behind it are surprisingly mundane and oddly have nothing really to do with options at all. The reality of the situation is that the idea of binary options was something that no-one had considered before and as such no one really knew where it fit and so across the world people began to consider it nothing more than gambling which is something it is not. As such people began to treat it as gambling as opposed to what it really is; which is a system by which people can speculate against the prices of a stock or asset over a given time through strategic planning and risk management applications.

If it is really safe then who regulates it?

Well here is where it gets a little tricky. Due to it being a new financial prospect many countries were wary of it and with little knowledge of how it worked decided that they were better off without. As such many options brokers began their business in Cyprus and it is from there that it flourished in popularity. This means that a Cypriot regulator was required for the majority of brokers and so it came under the guiding hand of CySec or the Cyprus Securities and Exchange Commission. If you look at a list of the top binary options brokers you will see that they are all regulated by CySec. In the years following many new brokers appeared in the market and spread to other European countries which brought up the regulation issue once again. But this time it could not be silenced and now many countries around the world have their own regulatory bodies.

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What if I find a broker that is unregulated?

First off, don’t panic. I’m not going to say that all non-regulated brokers are good reliable people but the majority are. More often than not they are unregulated because the work out of a country that has yet to offer up a regulatory service. In essence the regulators job is little more than making sure those binary brokers operate legally and that they are covered should the worst happen.

Regulation of an Option. What should I look for?

At the end of the day any investment you make should be investigated first. If you have found a broker you like try to invest a small sum into it and then check the withdrawal procedure. Furthermore if you are concerned about how regulated a broker is then ask them who they are covered by and if at any point you are unsure then do not invest. You can always use the no deposit bonus to study the basics of trading.

Will Regulation of an Option prevent me from losing my money?

No. When all is said and done it is still a financial risk to invest in trading the markets. This is why trading strategy and planning are key to binary potions success and the risk management side of it all is what separates it from gambling. Traders rely and thrive on the information side of it as much as the cash investment so if you are looking for a quick cash fix then options are not for you.

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