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Regulated vs. unregulated binary options brokers

The topic of regulations is a heated one in the field of binary options trading, opinions being split between the ones that prefer working exclusively with regulated platforms and the ones that don’t consider this to be a major criterion. The truth is somewhere in the middle: being authorized does offer certain guarantees, but it is does not mean that specific broker is the most transparent or profitable one. To make sure your money in invested in the right place, you should consider other aspects as well. Stay informed by reading reviews on websites like, compare offers and avoid bonuses that look too good to be true.


What is a regulation?


There are several institutions that issue regulations throughout the world. In Europe, the biggest authority of this kind is CySec, based in Cyprus. In order to receive a regulation, a broker has to comply with certain criteria. Before offering an authorization, the regulator will check whether or not the broker is reliable and transparent. They will verify the legitimacy of the business and if it has sufficient funds to keep its promises. If a regulated broker goes bankrupt, they are still bound to offer traders their due earnings. One of the oldest brokers in the business and one of the first to get a regulation was 24Option.


What does a regulation guarantee clients?


A regulation guarantees clients that the website they use to trade binary options does not engage in fraudulent activity, in the sense that it does not steal the trader’s money. If you choose to work with a regulated broker, you know that it’s a legitimate business that can really offer you the money it promises and that you can count on a prompt customer support system. However, the regulation does not imply the best offers, the best user experience or the most diverse account types. Also, you should still look out for the fine print. For best results, you should read a thorough analysis of that broker, such as this 24Option review.


Are unregulated brokers a scam?


Not necessarily. Obtaining a regulation is a lengthy process and a broker can choose to start its activity while the license is still pending. Of course, while trading on an unregulated platform, the provider can apply whichever terms he wants and modify them at any time, without these terms being in your interest. However, there are many platforms that haven’t been licensed by CySec, but which are perfectly legitimate and offer really good trading conditions. You can find out how reliable a broker by reading a lot of reviews and asking on binary options forums. If you want to be extra safe, then you should first create a demo account and trade with virtual money. During this trial period, you can test the functionality of the website and the quality of the customer support system. Only if you are satisfied with your experience can you proceed to create an actual paid account and trade with real money.