Binary options ARE legal in the United States but are regulated by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Currently, the THREE leading USA-regulated brokers are Nadex, Cantor, and CBOE. Read on for information on these 3 approved brokers for the USA.
If you’re wondering, “hang on, that doesn’t seem like the binary options that I know!”, you’re absolutely right! Read on till the end of this post!
What Is Nadex?
Nadex, short for the North American Derivatives Exchange, is a regulated binary options exchange based in the United States. It is one of the most well-known and reputable binary options platforms operating in the country. Nadex operates under the oversight of the Commodity Futures Trading Commission (CFTC), ensuring transparency and fair trading practices.
One key aspect that sets Nadex apart from other binary options brokers is its exchange-based model. Instead of trading against the broker, Nadex facilitates trades between traders, providing a platform for buyers and sellers to execute binary options contracts. This creates a more transparent and potentially more favorable trading environment.
Nadex offers binary options, knock-outs and call spreads. The asset classes offered include Forex, Indices, Commodities and Cryptocurrencies. On the charting aspect, functionality is limited, and there are no third party research tools. Interestingly, Nadex lets users trade the result of news events, such as whether the Non-farm Payroll figures be above or below estimates.
For those looking to trade currency binary options, please note that the expiries are strictly 5min, 2hours, and end of day.
What Is Cantor Exchange?
Cantor Exchange is another regulated binary options exchange operating in the United States. It is a subsidiary of Cantor Fitzgerald, a global financial services firm. Cantor Exchange operates under the oversight of the Commodity Futures Trading Commission (CFTC), ensuring compliance with regulatory standards. Incidentally, 658 employees died during the tragic 9/11 air crash.
Similar to Nadex, Cantor Exchange follows an exchange-based model for binary options trading. It provides a platform for traders to buy and sell binary options contracts directly with other traders, rather than trading against the broker. This setup promotes transparency and fair pricing.
Cantor Exchange offers a range of binary options contracts on various markets, however, what’s noteworthy is that Cantor Exchange makes “weather derivatives” – where one can buy or sell options about rainfall, snow depth, and weather prediction, and win a payout for being correct.
What Is The CBOE?
The CBOE, or the Chicago Board Options Exchange, is one of the largest options exchanges globally. It was founded in 1973 and is located in Chicago, Illinois. The CBOE specializes in trading options contracts on various financial instruments, including stocks, indexes, exchange-traded funds (ETFs), and other derivatives.
The CBOE is known for its innovation in the options market, having introduced several groundbreaking products. One of its notable contributions is the introduction of listed options trading, which standardized options contracts and provided a regulated marketplace for options trading.
In addition to its options trading platform, the CBOE operates the CBOE Volatility Index (VIX), often referred to as the “fear index.” The VIX measures market volatility and is used as a gauge of investor sentiment and risk appetite.
How Am I Supposed To Trade With That? Any Other Binary Option Brokers?
Yes, there are. Are they CFTC and SEC-approved? No. The “other” kind of binary options that you’re used to seeing is still available via off-shore brokers. These brokers do not explicitly advertise they accept USA customers, although they do. To get around monetary controls, deposits and withdrawals are usually done via cryptocurrencies and e-wallet services. At present, Pocket Option is still accepting USA clients.
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The last one, Quotex, unfortunately says, “Quotex is currently not available in your region. (United States)”
Oh! That’s interesting. Try the other one. Pocket Option. I’ll try contacting the broker to see if their terms have been updated.