Is it Legal To Trade Binary Options For USA Citizens?

 

The short answer is yes. US traders can legally trade binary options! There is is nothing illegal about trading binary options for Americans.  It is smart to always check the local laws, ordinances, rules, regulations, stipulations, fine print and your and your home owners association policy before doing anything on the internet. But but binary trading is legit for USA citizens.

Updated for 7/27/2015.

Legit and Legal Binary Options Trading Sites For Americans

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Create Demo Account
80% $2000
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80%100%
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74%$1000
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78%$5000
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85%$650
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75%$5000

Only the brokers with the small US flag next to their brand currently accept US traders
*I would like to add the exceptional broker, MarketsWorld.com to the list of US friendly brokers. They are highly recommended, regulated and legit. They made the short list at BinarySites.com as well.

Legalities

In 2007 the US Securities and Exchange Commission, the SEC filed to a rule change to binary options – While we are not lawyers or going through this entire pdf, essentially after this, the binary trading sites were allowed to offer binary options to US residents.  According to this press release on April 8th, 2008, the CBOE (Chicago Board of Exchange) filed for approval of index based binary options trading.  With the S& P 500 to be the first listed.

Good news, there are a small handful of high quality, legit binary brokers you can trade at. You can see my quick reviews on these sites here: http://binarytradingsites.com/reviews/

  • MarketsWorld www.marketsworld.com – Regulated by the Isle of Man (island off of the UK), this broker does it right by accepting all US traders and starting everyone with a 100% free demo trading account.

  • Goptions (www.goptions.com) – fast cash outs mixed with an strong bonus offer, spot-option trading platform and a team focused on US traders make Goptions one of the few quality choices for US based traders.
  • CherryTrade (www.cherrytrade.com) – Extremely easy to get started trading. Clean, user friendly, competitive returns and low minimum trade amounts. A reputation of offering fair traders and paying out in timely fashion make Cherry one of the most enjoyable sites for US based traders.

Licensed, Regulation and Reputation

Now keep in mind that unless you are looking for binary options trading companies with offices in the USA then you are going to be hard pressed to find anything more concrete than NADEX. The reason for this is that while brokers can freely accept US citizens they have their headquarters in more tax friendly jurisdictions in Europe. Specifically Cypress and the Isle of Man.

The license process for US regulation as well as international regulation is a lengthy and tedious one. Quite frankly the binary options industry are so relatively new that the entire framework of legality and licensing is not completely worked out to a point where we can conclusively say everyone is properly licensed.

What is the most important to you anyway? A government seal of approval or a reputation earned from past performance. The sites we list all have a positive history and are in the process and often leading the charge for out and out regulation and licensing.

And speaking of these brokers being headquartered in other countries like Cypress, you can see that they are moving forward with the CySEC regulation and possibly FSA following. Of course

Why So Few US Brokers Listed?

Because there are a ton of scams out there.

That’s the short honest answer.

There are hundreds of binary trading sites online right now. Many of them aren’t worth the disk space their website is hosted on. Many of them are out and out scams. Some of the other legit brokers also decided to stop accepting traders when the passing of the UIGEA and laws that were so confusing they decided that rather than to risk the wrath of the US government it is best to just avoid the US market all together.

Trade at the good sites. The legit brokers. The quality options banks online.

Research and Links to US Trading Laws, News & More

There is no clear consensus as to what lies ahead in the world of binary option trading and specifically in the US market. Being one of the more regulated trading markets and the fact that uncle sam is more than happy to step in, I expect more and more laws restricting some of the brokers in the future. This is another reason the above sites are featured because they are the ones leading the charge for regulation on the federal level with the US government. They are the ones that are the most likely to be allowed in first.