There are many binary options brokers that claim to be regulated in the USA but unfortunately this is not always true. It’s important to understand that there’s a big difference between US regulated binary options brokers and brokers that accept US traders. Today there are many brokers accepting US traders but only one that is CFTC regulated.
Nadex and CFTC regulation
In America, binary options are regulated by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). To date only one broker has achieved regulation from them, and that is NADEX, an options exchange governed and monitored by the CFTC.
Nadex functions more like a typical exchange than an online broker and there is a fee structure for making trades, ranging from $0.90 to $9 per trade, depending on the trade. Brokers can’t offer stock trading without a FINRA (Financial Industry Regulatory Authority) license, so the Nadex exchange offers binary options trading on Indices, Forex, Commodities and Financial Events.
The minimum deposit is $100 and there is no fee to open a trading account but traders need to complete a regulatory questionnaire and submit the following information:
- Permanent US Residential Address
- Date of Birth
- Social Security Number
- Employer Name and Address
Future of American binary options brokers
As more brokers apply for CySEC and European regulation, it becomes more likely that we will see another US regulated binary options broker sooner than later. Within the last few months we’ve already seen Banc de Binary apply for, and get refused, CFTC regulation.
Regulations and brokers are changing all the time and it is important to keep up to date with the developments. It’s best to check periodically with sites like TradeOpus.com or the regulatory agencies at www.cftc.gov and www.sec.gov.
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US Friendly Brokers (accept USA traders)
There are many brokers that are not CFTC regulated but are US friendly and accept US customers for binary options trading. In our experience, the top 3 are: