Regulated BO Brokers: Pros and Cons
Regulated binary options brokers are few and far between. By reading the impressions of traders in blogs and reviews, you’d think 99% of brokers are crooks, incompetent, or both. The truth is not as severe as that, although nobody is going to deny that there are many unregulated brokers out there and there’s even more people got burned by those guys. Also, it is not uncommon that a rookie who lost a lot of money looks for somebody to blame, or at least get even, so they slam heir brokers a viciously as they can. In turn, some brokers hire out people to sing praises of their skills to attract customers or slander the competition. Regulated BO brokers are not like that.
A word of warning:
Being regulated is not a guarantee of success no more than being unregulated is a sign of a fraud. Neither have any basis in facts. Being regulated simply means the broker has gone through the trouble of completing a complicated process and comply with certain rules and standards. It says nothing of their competence or reliability.
So, having said this, why bother looking for a regulated trader?
Well, one reason is that they were professional and responsible enough to do things the official way. Few crooks would go out of their way to get regulated, especially as this increases their chances of getting caught, and for only a marginally bigger ill-gotten gain. It’s simply not worth their while, when they can just hide among all those unregulated (and otherwise honest) brokers. Being regulated also means they have to comply to standards and norms most lesser brokers would find unbearable. There is oversight from some sort of a regulatory body that makes sure the rules and regulations are being enforced and settle disputes. You don’t get that with unregulated brokers. If a regulated broker cheats you out of your money or offers substandard services, they would lose their status.
Regulated does not always mean better
For one, regulated brokers are kept in line by regulations restricting their actions and, ultimately, profit margin. Regulated brokers can even refuse to do business with you, because of some obscure regulation, even if you haven’t done anything wrong. You simply do not conform to the standards that they had to accept. So, the money is lower and they can turn you down for no good reason. And even if you pass muster, you may still lose money because you’ve made a bad trade or the broker made a mistake. These things happen.
If you do opt for a regulated broker, make sure you verify some things:
They need to be regulated by an official regulatory body; they need to be able to do business with you, and to offer transparency concerning finances. Make sure they offer the best terms, bonuses and perks you can get. Finally, good reviews: arbitrary as they may be, if people complain about a broker over and over, he must be doing something wrong…