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Understanding the Legalities of Trading Binary Options in the USA

Understanding the Legalities of Trading Binary Options in the USA

Despite its popularity, it is illegal to trade binary options in the USA. Many international brokers, however, accept US traders while there are only a limited number of companies in the US who have a license which allows them to offer online trading in binary options.

Understanding the Legalities of Trading Binary Options in the USA

Binary options trading is recognized as illegal by the Federal Law and the State Law in the USA.

The financial market in the US is regulated by the Commodity Futures Trading Commission (CFTC) as well as the Securities and Exchange Commission (SEC).

These committees are tasked with overseeing the US financial service markets as well as ensuring that the country’s trading laws are adhered to.

The bottom line is that online gambling is banned in the US and binary options trading is recognized as a form of gambling since this type of online trading is not backed by any exchange.

Before you panic, you can trade binary options in the US as long as you are trading with an exchange-backed binary market operator. If a broker operates binary options on Exchange-traded funds (ETF’s) which are listed on AMEX and CBOE (Chicago Board Options Exchange), then it is considered legal to trade with these brokers based in the US.

NADEX is one of the very few brokers who operates binary options trading legally in the US. This company is Chicago based and it is registered with the CFTC. Remember that it is vital to only trade with a recognized broker in the US to ensure that your funds are safe and secure.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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