Is Binary Trading Legal In The USA?

by The Suit on June 21st, 2013

American MoneyWith binary options trading only recently, in the later half of 2012 and into 2013 just coming fully into the spotlight, a lot of traders are at a bit of a loss where regulations and legalities are concerned. Especially in the USA where regulations and laws are constantly changing. There are two main aspects to this issue. Legalities concerning the binary trading brokers and legalities concerning the actual binary option traders. IE, you, most likely.

Updated for 2014

It’s not illegal for you (US citizens) to trade binary options. If you’re in the US you are going to have a smaller but quality selection of legit binary brokers to trade with.

It’s simply that since the loving US government have labeled binary options trading akin to a new form of gambling, you will to have a more difficult time finding a broker that will accept you if you’re a US citizen. You can trade at GOptions, MarketsWorld and BossCapital. If you’re located anywhere else in the world, other than the USA, then you won’t have as much of a challenge. So have a look at various binary options platforms, and check if they accept US traders first. Then test out their features and read reviews of broker reputations before you decide which broker to invest your money with.

Legit & Legal USA Binary Options Trading Sites

BrokerUS AcceptedMinimum DepositStart Trading
$200
$20
$200
$200

Learn more about these brokers in our reviews.

*Page last updated 7-21-14

The Best Brokers US Accepted – US Friendly Trading Websites

The above binary trading websites are where hundreds of thousands of US investors and traders are placing their trades at today.

Some binary options brokers are regulated and some are not. On the whole, government regulation is not yet as strict for brokers of binary options as it is for brokers for Forex or some other trade types. Regulation also does not automatically equal instant reputation and a quality, legit place to trade.

That, comes from an earned reputation. Which the above brokers have earned through quality service, fair trades, fast payouts and good customer service.

If you trade with a non-regulated broker, the risk is that there is no third party to monitor the transactions and ensure that fairness is upheld. Other than the binary trading community at large. Your money may not be kept in a trust account. If your broker is regulated, however, there is a third-party watchdog which helps to ensure fairness, and your money is required to be kept in a trust account. Several months ago in May of 2012, the Cyprus Securities and Exchange Commission (CySEC) announced that binary options are now classified as a financial instrument by the Cyprus government and that all binary options brokers within Cyprus will have to be regulated within six months of the announcement. So if you’re looking for a regulated broker, you might check for a Cyprus-based broker first; there are brokers with great reputations however which aren’t yet regulated. A very popular broker called BDB used to serve the US market but for now we have to strike Banc de Binary and 24option, who also no longer accepts US action.

What BloomBerg Law Has To Say About Dodd-Frank Bill

Most of the confusion about the legality of binary options trading in the US revolves around whether it’s legal for citizens to trade or not. With the recent implementation of the Dodd-Frank Financial Reform Act, there have been a lot of changes to the way that brokers operate. With tightened restrictions (which are confusing to many existing brokers), a number of international brokers have decided not to offer their services to US clients at this time, because they want the terms of the restrictions to be clarified before they find themselves violating terms without meaning to. In short, it’s a confusing mess and no one knows the entire answer.

Are binary options a scam? No. Binary options are a legit way to trade stocks, currencies, commodities and indices. The potential scams come in when dealing with less than reputable brokers or falling for advertisements promising 300% returns in an hour. Sure those returns are possible but the risks are huge, and they never mention that in the marketing.

8 Responses

  1. Mark Miller says:

    To whom it may concern:
    I am new to trading binary options but have a desire to get started. A friend suggested I try the broker OptionXP, so I decided to go online and do a little research since I have heard that you can get scammed. I came across your web site and I noticed that you did not rank OptionXP in your top recommendations. I was just curious if you felt they were a good broker. My friend had positive feedback about them. I was hoping you could please clarify for me your experience with them and what criteria you use when ranking and recommending these companies you have listed on your site. I really appreciate your feedback.
    Sincerely,
    Mark Miller

  2. The Suit says:

    Mark, thanks for the comment. I’ve not traded at OptionXP but have read enough online that made me think there were much better choices. Options XP is rated as “stay away at binaryoptionsblacklist.com.

  3. Mark S. says:

    Banc De Binary no longer have the NY address. The office and the server are in Cyprus.

  4. Bruce A says:

    So is there really an honest, legal, ethical binary broker in the U.S.

  5. Always Bets High says:

    Bruce, Nadex.com is regulated by the CFTC and other US regulatory agencies. But most people are looking for the legit offshore guys where you can easily bet on price moves.

    I like TradeRush and MarketsWorld. Both solid + reputable.

    Good luck with your trades!

  6. Larry Pitcher says:

    Definitely join NADEX !!
    I made +227% there collecting deep in the money, options premium last year and started a CFTC Pool to trade for clients this year.
    Larry Pitcher
    Quantitative Algorithms Capital Partners, LLC
    Not a solicitation to invest. Past performance not a guarantee of future results.

  7. H.G. says:

    Which trading companies have the binary options with 60 seconds trade here in the USA.
    Commment: NADEX has the binary option but doesn’t have the 60 second trade. ;-(

Leave a Reply


− two = 1