Sensible investors will always choose to trade with a regulated and licensed broker as oppose to an unregulated broker.
The reason traders choose regulated binary option brokers is because, they are looking for an honest broker, who will not co-mingle funds from their account with the firms money.
A regulated broker ensures that a trader can withdraw their funds from their trading account. Licensed binary option brokers tend to have a better reputation than unlicensed brokers. In the event that a regulated broker declares bankruptcy, the traders funds are usually protected by the investors fund.
CySEC European Regulated Brokers
You can get a free demo account, or trade live for $100, see here.
Australia Regulated Brokers
Brokers in Australia are licensed and authorised by ASIC. The most prestigious license for a binary options broker is from ASIC.
Financial Regulators in Europe are members of the MiFID, which means that a broker who is registered at the FCA in the United Kingdom, is recognized as a authorized financial service provider by BaFIN in Germany and the CONSOB in Italy.
European regulators recognize binary option brokers as financial services organizations and they must be regulated by their countries regulator. The Cyprus Securities and Exchange Commission is the most widely recognized regulator of binary option brokers. As many brokers are regulated in Cyprus by CySEC this allows them to operate in all European Union member countries.
Investors looking for automated trading robots should first look at these.
Only use a software that integrates with a licensed broker.
Recently, some unregulated brokers have started including this line on their site. “Binary Options are the simplest way to trade the market. They have been available since 2008, and have become regulated in Europe by CySEC in May, 2012.”
This does not mean that the broker is licensed by CySEC. It means that CySEC happens to be a regulator, but they do not have a license. A trader should look for a 5 digit CySEC license number and then go to CySEC’s website and verify that the license is still valid.