Binary option trading brokerages for US residents has been a popular topic of discussion lately. After the 2008 Farm Bill and the Dodd-Frank Wall Street Reform Act of 2010, many binary brokerages closed their doors to US traders. However, there are still a number of firms offering binary options trading to residents of most countries including the United States. This article was compiled to guide US traders through the process of finding and registering with a binary option brokerage.
The Legality of Binary Options Trading in the USA
The binary option industry was created in the USA and is very popular among US traders. It is legal to trade binary options in the USA. There are currently no state or federal laws to prohibit US citizens from trading binary options. Binary options brokerages based in the US are supervised and regulated by the; U.S. Commodity Future Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC).
Offshore Licensed Brokerages
The majority of binary options brokerages that accept US traders are licensed and located in offshore jurisdictions. Trading with an offshore brokerage is not anymore risky than using a domestic brokerage (usually safer) since they are still required to abide by the laws and regulations of the countries their license(s) and regulation(s) are from. Most offshore binary option brokerages are licensed and regulated in multiple jurisdictions which make it even safer for the trader. The majority of European jurisdictions have stricter requirements for binary option brokerages when compared with the CFTC’s requirements.
There is not much competition among US based binary option brokerages since the CFTC limits the number of licensees. The international binary option arena is quite the opposite. Offshore binary option brokerages aggressively offer; large payout rates, bonuses, signup incentives, quick account opening procedures, fast deposits and even faster withdrawals. 24/5 and 24/7 customer service is not uncommon either.
Recommended Requirements for Binary Option Brokerages Accepting US Traders
First and foremost; a trader needs to find a binary options brokerage with a solid and reliable track record. This will guarantee that traders are paid out on time, every time. Secondly, it is important that the binary options brokerage offers a full spectrum of different and varied types of options to trade. Brokerages with a limited number of options to trade greatly decrease the chances of being a profitable trader with their firm. Lastly, the deposit and withdrawal options are very important ESPECIALLY for a US based trader.
There are a number of requisites that every US binary options trader should look for when choosing a brokerage. It is suggested that traders check with their potential binary option brokerage to confirm the following criteria before opening an account. (ForexGator.com recommends all of the binary option brokerages mentioned on this website and the ones listed on this page accept US traders. Just click on any banner and visit the brokerage’s website. New traders will receive a signup bonus when they are ready to start trading!)
• US Friendly Banking Options: It is important to choose a binary options brokerage that offers several USD deposit and withdrawal options. It is best to avoid brokerages that offer funding options limited to bank wires. This is normally the most convenient funding method for the brokerage however it is the most costly for the trader; unless, there is an incentive or bonus being offered for funding by wire transfer. Ease of withdrawal is as important if not more important than ease of depositing. Review the different withdrawal methods; the estimated timeframes and costs of withdrawing by each method. Have a plan on how you will withdraw funds from the brokerage. If you plan on withdrawing large sums of money, will a bank wire be the most cost effective? What is your plan if you are only withdrawing smaller amounts? Most likely a credit to your credit or debit card will be the fastest and least expensive.
• US Dollar Trading: It is advised to fund and trade in US dollars. Certain binary option brokerages may require you to trade in a different currency. This will cost you when exchanging out of USD to trade and then back into USD when you withdraw. There is no reason to trade outside of the dollar when most brokerages will allow you to trade with it.
• Multi-Platform Access: How will you be trading? By using your; desktop, tablet, smartphone or all three? Check with the binary option brokerage to see what trading platforms are available to US traders. If your preferred methods of trading are not offered; choosing a different brokerage will most likely make more sense.
• Does The Broker Have a Valid License: Check the brokerages to see where they are licensed. Out of all the European Union member states; Cyprus and the UK are the best and most popular.
• Online Trading Software Used: Make sure the trading platform software is user friendly and professional. Unprofessional software will not allow a trader to properly research the markets. The best software allows for traders to utilize; charting tools, flexible expiry times and a large number of options to choose from among many other features.
• Assets and Contract Types Offered: The top binary brokerages provide a large number of assets to choose from including; stocks from established American companies and numerous currencies. The most common binary option contracts are high/low options. The top binary option brokerages offer a number of contract choices; touch contracts, 60 second contracts and range option contracts to name a few.
• Competitive Payouts and Bonuses: A trader becomes profitable when they predict the movement of an asset during a certain period of time. Most binary option brokerages use a payout rate to calculate the profit. For example, if you trade $100 on an option that promises a payout of 90%, then in the case of success you will receive $190. It is important to always choose a binary option brokerage that offers the largest payout rates.
The Best Binary Options Brokers for USA Traders
Currently the top binary options broker for US traders is Finpari. Finpari has a great reputation and is among the most trusted in the industry. You can easily open an account with them by clicking on the banner below. New traders originating from this page will also receive a very generous bonus. Since we started following and reviewing Finpari’s activities; our traders/contributors have had nothing but positive trading experiences.
We constantly keep reviewing binary option brokerages and will list any others as we determine them to be trustworthy and reputable. ForexGator.com does not believe in listing hundreds of brokerages but only the best.
We advise all new binary option traders to read our additional articles and resources to help you become a successful trader. You can reach our binary options blog here.