Tag Archives: regulation


A New Empire On The Rise?

EmpireOption has begun to build what could be called a new binary options empire in South America.  This broker is very unique in several ways and is emerging as a leader in the industry. For one, it is a SpotOption powered broker but it is not part of the SpotOption white-label broker network. For another it is located in Uruguay and is regulated there under the Commerce Code of the same.

Why do these things matter? The platform that powers trading is one of the most important aspects of a broker. The platform is what the broker is all about. Assets, expiry, types of options, hours, pay outs and extra features are different from platform to platform and even from broker to broker within a platform framework. SpotOption is a great platform with one of the best available asset lists and most expansive choices of expiry, but it is also a white label business. This means that anyone with the resources to start a business in an appropriate location can buy into SpotOption, use all of its infrastructure, and put a whole new brand on the entire website, making a so-called “new” broker. This is why there are so many SpotOption powered brokers and why so many of them suck so bad. Empire is different because it is an independent business.

  • EmpireOptions is built on the Spot2 platform, one of the top platforms available today. It is not a SpotOption white label. EmpireOption is an independent company operating with its own resources, cashiers and banking solutions.
EmpireOption uses the Spot2 platform.

EmpireOption uses the Spot2 platform.

EmpireOption Is A Regulated Broker

Regulation also matters, it matters very much. Binary option regulation, in its various forms, can mean the difference between a broker that merely looks great and one that actually provides a fair trading platform and pays you when you make withdrawals.  Uruguay regulation has no jurisdiction outside of the country but it does mean that EmpireOption has to operate as a business under the watch of South America’s leading economy.  Unlike CySEC brands, EmpireOption welcomes U.S. traders and offers them the same great trading as citizens of any other nation.

The New EmpireOption

When Empire first came out they were not greeted with much enthusiasm and received some very mediocre reviews. The company took the words to heart it seems because they went to work and have emerged as a fresh new broker.  Along with a major overhaul of the website the company also changed how it treats your accounts. Instead of rewarding traders with bonuses that come with trading minimums and prevent withdrawals Empire uses a tiered account system.

The basic account comes with features and terms that you would expect to find standard at most binary options brokers. The minimum deposit for a Micro account is $200, not uncommon and maybe even below average . The Micro account has a $25 minimum trade, a $500 max withdrawal per action and all withdrawals cost $30. These terms are not awesome but as I said, not uncommon. Keep in mind that traders are rewarded as their accounts grow so this is not what I would call standard for the company. As your balance grows and you meet the next tier requirements your benefits improve. It only takes a balance of $1,000 to start getting some really nice improvements in your terms.

There are 5 tiers. The next up from the micro is called the Classic. Minimum balance is $600, minimum withdrawal is $100 and they are processed in 7 days instead of 10. Cost is $25 for each, the first is free.

EmpireOptions has a tiered account system that rewards larger accounts.

EmpireOptions has a tiered account system that rewards larger accounts.

The top tier is the VIP. VIP accounts have a minimum balance of $20,000 for the month and have no limit on withdrawal size, no limit on number of withdrawals, no cost for withdrawal ever and withdrawals are processed immediately. The only lag time for your money will be from the bank, credit card or online wallet you use to make your request. In order to meet account requirements minimum balances must be maintained for each level and a minimum number of trades must be made for the month. The lowest tier has the highest trade minimum, 20 trades of at least $25, the VIP tier has the lowest, only 5 trades.

This new system is revolutionary I believe. It provides the broker with a means to limit costly withdrawal actions from smaller account holders, encourages them to build their accounts and rewards them as their accounts grow. This could be the model that CySEC brokers follow as they phase out the bonus system, something I keep hearing rumors about.

Click here for a full review of EmpireOptions.


Cyprus Bail Out Affects Binary Options Trading

How Does The Cyprus Bank Bail Out Affect Binary Options?

I’m sure by now you have heard about the Cyprus bank bail out and at least a few of the details. In short, the country’s enormous banking sector is hurting for cash. This is due in part to large bets on Greece, bets that failed to pay off when that nations debt was restructured. Now the Cypriot banking sector is billions of euros in the hole and in need of help. This is not a surprise and not the reason why the markets sold off as hard as they did. What surprised everyone was the nature of the bailout structure. The EU and IMF want Cyprus to put up a substantial portion of the money themselves which is not a bad idea.

Cyprus Bail Out A Minor Blip On The Radar

Cyprus Bail Out A Minor Blip On The Radar

The EU can help but it shouldn’t necessarily be on the hook for the whole deal. The problem is that Cyprus doesn’t have the money to solve its problem and doesn’t really have a way to raise it. The country does not sell bonds in great quantities and there is little else to tax there but the banking sector. The banks don’t have money to tax which brings us back to where we started. This is the part where it gets tricky. Cyprus proposed over the weekend to enact a new tax in order to raise the money. This was also not a surprise as we have seen similar things in other ailing EU member nations. What was surprising was the where the tax was to be levied; average depositors. Since there is nothing else to tax the Cyprus governments only recourse is to target the 100’s of billions of euros deposited in its banks.  At first reports there was going to be a 9% tax on all bank checking and savings accounts. Since then this has been tempered to a more structured plan that puts less weight on deposits under $100,000 but still affects all account holders, native and foreign. At current reports Cypriot banks to remain closed until Thursday.

How Does Cyprus Affect Binary Options Accounts

This is a problem for Cyprus for a number of reasons. First it means that a lot of their depositors will leave and the economy will shrink rapidly.  Most of the Cyprus banking sector is built on providing tax havens for off-shore account holders.  Now all of these accounts are subject to the new tax. There are already reports of runs on Cyprus banks and ATM machines out of money. Not to worry binary traders this will not affect you. My source inside 24Option told me that it would not affect binary options accounts. Of course, that statement does not take into consideration those of us who will be trading on this news.

Fear Drives Knee-Jerk Reaction

The fears are primarily concerned over the affect Cyprus will have on the EU. Will a similar tax be levied on other countries? Will this affect other tax havens like Switzerland and Lichtenstein. I think this is highly unlikely. In my opinion these fears will pass. The broader EU has other methods with which to battle it’s problems. This is why Cyprus is calling on it for help. Cyprus can’t afford to alienate its off shore account holders and it can’t afford to alienate the EU. It will have to come up with another solution though and that could come in the form of a bond auction.

The fear will likely subside soon and leave us with the underlying fundamentals of the world economy. Stimulus plans around the globe are gaining traction. Economic data supports growth in the U.S. and there are signs of this in other countries as well. The market sell off caused by the Cyprus bail out is most likely a buying opportunity on the S&P500’s trip to make a new all-time high.  Many speculators have been waiting for a dip in the index in order to buy into the latest leg of the rally, this could be it.

Long Term Impact Of Cyprus Bail Out

The bail out will not doubt have long term repercussions for Cyprus and its banks but what does it mean for binary options traders. At this time not much. The dip we saw on the initial news will soon fade. However, if no agreement can be made there is a risk of Cyprus leaving the EU. This could have a wider impact and possibly add momentum to the bear side of this trade. At this time though I think this (a Cyprus exit) is less likely than when we were talking about Greece doing the same thing. But, should it happen, it could impact binary options regulation. Much of the credibility of CySEC regulation comes from the EU ImFIB and other governance’s that regulates financial activity in the European Economic Arena through the EEA passport.

Nadex is CFTC regulated

Why NADEX Is The Best For U.S. Binary Options Traders

Trading NADEX Is The Right Choice For U.S. Traders

Nadex is CFTC regulated

Nadex is CFTC regulated

After more than a year researching and blogging about binary options, binary options brokers, platforms and regulation I have learned many things. One of them is that NADEX is the right choice for U.S. traders. There are just too many risks to trading with offshore brokers to make any other choice. Unless you are a gambler and just want the thrill of 60 second options (which are not available through NADEX) there really is no reason for you to trade anything else but NADEX. I’m not saying that European, CySEC regulated, binary options are bad mind you. I am saying that U.S. citizens should turn to NADEX.

NADEX Is The Only U.S. Regulated Binary Options Exchange

NADEX is the only binary options exchange in North America that is solely for trading binary options.  NADEX is also the only binary options broker licensed, regulated and allowed to operate in the U.S. The AMEX and the CBOE have exchange listed binary options that are traded in a similar fashion to NADEX but they are not available to retail traders. Plus, NADEX has more assets and exposure to more markets than either the CBOE or the AMEX. At this time no other binary options exchange or broker is allowed to sell investment products to U.S. citizens except Cantor Exchange and they are not fully functional yet.

Commonly traded Nadex binary options.

Commonly traded Nadex binary options.

There are some off-shore brokers still offering binary options to U.S. citizens but don’t be fooled. They are well meaning but probably won’t tell you there is a good chance they will get banned from the U.S. One kind of broker still taking U.S. citizens is the unregulated broker. These are primarily gambling sites or scams and should be avoided at all costs. They are usually fairly easy to detect. Many off shore brokers fall into the next category; CySEC regulated. These are brokers regulated by the government of Cypress and falling under the broader regulations of the EU and the MiFID. These are at least trustworthy in the sense they must comply with oversight, regulation and sanction but they should still be approached with care. Some brokers are better than the rest.

Brokers like AnyOption and 24Options are all CySEC regulated and good choices for European based traders. This I think is a sign of their commitment to legitimate binary options trading. I would look for more brokers to follow that lead and for BDB to search for regulation in other countries as well. Another broker of innovating and leading the binary options industry is Anyoption. This broker has begun to offer 0-100 options that are traded in the same way NADEX options are traded. This could lead, in a best case scenario kind of way, to integration with NADEX at some time in the future.

The problem with CySEC for U.S. traders is that these binary options and brokers are classified as investment instruments and providers of investment instruments. The CFTC and the SEC have a lot to say about how these two things are handled in the U.S. Basically, to sell or market investment instruments especially options, futures and derivatives contracts you must be regulated by the CFTC and the SEC. So far no off-shore broker has gained that certification. One by one the best European style binary options brokers are going to be shut off from access to the U.S. markets due to CySEC regulation, yours could be next. To date I know that Banc De Binary is no longer taking U.S. customers due to regulation and that 24Option is soon to follow. My contact informed that minimum deposits for American traders was going up to $500 and after that there would be no more access.

How To Trade NADEX Binary Options

NADEX trades are easy to make.

NADEX trades are easy to make.

NADEX binary options are a little different than European style binaries. European style binary options trade for whatever amount you want to risk and pay a set rate. This rate is usually in the range of 70-80% depending on the type of option you buy. Pay out can go up to 500% or more for exotic instruments like one-touch options. This type of binary options only have one strike price, the price that you paid. They also only have two participants, you and the broker. Click here for information about the advantages of NADEX.

NADEX options are all worth $0 or $100 depending on if they are in the money or out of the money. The price of the option fluctuates during its lifespan in tandem with the price of the underlying. Traders pay the spot price for the options and can close prior to expiration if they want to. The price will range between $0.01 and $1.00 and are based on lots of 100 shares. This means that an option with a price of $0.50 will cost $50 to own and will return 100% profit if it closes in the money. Profit or losses from closing the options before expiration are equal to the difference in prices time 100. You can find information on NADEX strategies here.

Even though NADEX is an exchange like the CBOE, NYMEX, and CBOT it is easy to join. Retail traders can sign up for free and gain instant access. It only takes $250 to fund an account and start trading. The platform is easy to use and only requires a little time to master. The real advantage to NADEX that European style options don’t have is true flexibility. The options are trad-able, have so much many more expirys and offer the chance of much larger returns. Imagine, you are able to buy an option for $.035 and it closes in the money. The return is $1.00 for a profit of 185.7%.