What is a Regulated Broker?

Binary options trades are always processed through a broker. The brokers have offices or websites from which they operate to provide the investors and traders with the services.  The broker plays the most important part in a deal being successful. If the broker is a fraud, the investor has a risk of losing a part or all of the invested capital.

To eliminate the cases of fraud in binary trade, which had become very often in the recent past, different governmental agencies have started regulating the brokers. A regulated broker is the one who is registered with the local and federal government as a binary options broker. They have proper licenses issued to them by the government. However, it must be kept in mind that even if the broker is regulated, the government or the licensing authority cannot be held responsible for any type of financial or other loss in the deal between the broker and an investor.

In Europe, the traders are verified and regulated by the financial authorities recognized by MiFID. It means that the traders registered by the FCA in the UK are accepted as authorized financial service providers by BaFIN in Germany and AMF in France.

So, in the EU region, if a broker is registered with the financial regulatory authorities of one country, they can operate in the whole Europe. Cyprus Securities and Exchange Commission is one of the most accepted regulators of the brokers in the Cyprus and the brokers registered with them can operate legally in the whole EU. Forbes has a good article about this here.

Why Regulated Brokers?

A Binary options trader is advised to always go for a regulated Binary options broker to have a trade. The two biggest benefits of choosing a regulated broker are

  • They ought to be honest because they are monitored and audited by authorities. They won’t mingle your funds with the firms.

  • They let you withdraw the funds from your account with no restrictions

  • Regulated brokers also usually have a better reputation in the market. Your money is safer with them than it is with the unlicensed ones. Even if a regulated broker is bankrupt, the traders’ funds are usually protected by the investors’ funds.


In Europe, the traders are verified and regulated by the financial authorities recognized by MiFID. It means that the traders registered by the FCA in the UK are accepted as authorized financial service providers by BaFIN in Germany and AMF in France. Trusted Binary Reviews is one of the leading websites in broker and trading software reviews.

So, in the EU region, if a broker is registered with the financial regulatory authorities of one country, they can operate in the whole Europe. Cyprus Securities and Exchange Commission is one of the most accepted regulators of the brokers in the Cyprus and the brokers registered with them can operate legally in the whole EU.

 

 

Alert!

Some not-so-honest brokers include some deceptive lines in their advertisements which tend to express that the broker in question is a regulated one but as a matter of fact, they seldom are. One of the most popular lines is

“Binary options, the simplest way to make easy money are now being regulated by CySEC!”

It does not mean that they are regulated by CySEC but just tell you that the binary options are now being regulated. You cannot do anything about them in any court of law because they never claimed to have a license. To avoid people and firms like these just ask them for their 5 digits registration key and check for it on the CySEC’s website to verify if they have acquired a license and if the license is still valid.

Sometimes, asking only for a valid license and even having verified it may not be enough to trust a broker. On the website of FCA, the following directions are provided for the trader to fully ensure the reliability of a broker.

  • If you plan to do business with a brokerage firm, and its clearing firm are members of Securities Investor Protection Corporation (SIPC)

  • Try to get to know the people you are dealing with and try to judge their credibility by asking some simple questions like


o    Where did you go to school?

o    What is your employment history?

o    What is the scope of your experience?

o    Have you dealt with cases like mine in the past?

o    What licenses do you hold?

o    Has your license ever been suspended? If yes, why?

o    Do you provide any type of insurance on the investments/trades?

o    What if you go bankrupt?

o    Have you ever been sued by a client for any reason?

These are just some of the tips to help you invest in the safe hands. Always invest after you are totally sure that the firm, person or agency you are trusting with your hard earned money is really trustworthy enough because there are a number of fraudulent people in the field.

Quick Tip: How do Binary Options Work?

A binary Option is all about playing a guessing game.

It works like this. You take out your calendar and throw out a guess. You get asked , “Will X stock will be at Y price by Z date”.

Then you answer.

If the question is, “Will Enron Stock be at $100 by August 29th?” you could say yes or no. Oil is trending down, so I would say no.

This means I would sell my option. I do not think the market will bring the stock to that price point.

Get it?

You then attach a wager to the option. You put a price margin to buy or sell with. From zero to one hundred dollars. What ever you option is you risk limit. You can not lose more than the wager. This is why some will call Binary Options financial gambling.

You then decide to hold or sell the option before the specified date. In this case, I would hold the option until the 29th. If I am right, I get a my one hundred dollars.

The caveat is you can always cut your losses and sell early, or lock in the rate it is at now. Binary options require you to pay attention to the market. If you figure out financial trends, you can make a killing. Your financial advisor will think you can tell the future with just a little experience.

 

Revolving Employment and a 401K

Todays economy is different than all previous. Pre the dawn of the new century, one could expect to go into business for themselves or work for a company their entire lives. Now, one can expect a high turn over and employment with multiple companies. What does this mean to you? Planning for retirement is complicated. So is knowing what to do with you retirement fund once you leave a job.


Roll the amount of money into a fresh 401k


If you’re changing careers, you can always move the money in to the 401k plan at the new job. That is generally a good strategy if your brand-new workplace has a good finance selection. This will likely also make handling your resources just a little easier because you shall probably have fewer accounts. In my own situation however, I’m going out on my very own so this is not actually an option.


Get Cash Now


I can choose to really have the plan administrator write me a look for my complete 401k amount. Actually, this is actually the most popular option . Unfortunately, this is also the most severe possible option. EASILY choose to cash out my 401k balance, not only will 20% of the complete account be deducted for tax purposes, 10% more arrives as a penalty come tax time next April. I also lose all the taxes deferral benefits/


Leave My 401k Plan within my Current Employer
There’s always the choice of giving the 401k plan within my current employer. This isn’t an excellent way of controlling my 401k because I could never add money to the 401k bill. My current 401k plan does not have great investment options either, so I’m not considering this program.


Transform it into an IRA


So, that leaves us to the ultimate option of moving over my money into a IRA consideration. If I accomplish this, I’d ask my plan administrator to copy the cash to my new IRA plan and I’d never have to take care of the money.


This real way, there are no fees due no penalties incurred. EASILY choose a significant spot to create the IRA, I will also access a much wider collection of investment funds.


Normally, this won’t happen but even if the program administrator mails me the check, I still won’t need to worry so long as the check is manufactured out to the new plan rather than to me. After the check is received by me, I can only need the contact for the new plan have the funds transferred into my profile.