Binary options trading is something that is done in almost every country of the world but that does not give the over 400 binary options trading sites Carte Blanche to be traded anywhere. Some binary options sites are allowed to be traded in some countries but not in others. Take BDSwiss for example; although they are allowed to be traded on in almost every country in the world, United States investors are not allowed to use the site. Contrary to popular belief, this has more to do with tough banking regulations in the USA as opposed to brokerage regulations; the binary options market continues to be only lightly regulated around the world.
Even though USA traders cannot join and use BDSwiss, there are still other sites that USA investors are allowed to trade on. Unfortunately, that means they will not get to use all the features on the popular BDSwiss trading site. It is very hard for any broker to meet the demands of both the USA banks and the European Union banks at the same time, so you do not often see a website that caters to European and American customers; even though there are some signs that point to that changing in the future. But for now people have to settle for the fact that not every trader from every country can use any binary options broker that they want. This is the very reason why BDSwiss chose to focus their trading site on European and other countries and not USA based traders.
BDSwiss falls under the watchful eye of CySEC, a popular Cypress based regulation agency that is quickly becoming well respected by those who trade binary options on the sites that they watch over. Although CySEC is well respected, its authority does not supersede that of the U.S. Commodity Futures Trading Commission (CFTC) for American traders. All websites that cater to USA based traders must be regulated by the CFTC, even if they are approved by other regulatory agencies like CySEC. For those Americans that want to take advantage of all that BDSwiss has to offer, they will just have to be patient and hope the current regulations change in the future.
Why do we think this sort of thing may change in the future? It’s because there has already been a lot of shifting in the rules and regulations for trading binary options in different countries. People have to remember that binary trading is a type of investing that is really in its infancy. It did not even exist as a type of market trading until 2008.
Another problem greatly affecting regulation of binary options brokerages is this type of market trading is the fact it became more popular much quicker than anticipated. From what started as less than two dozen sites in 2008 has now grown to well over 400. It was hard for regulation to develop quickly enough with that type of rapid expansion taking place. So at least for the moment, USA based traders will have to look elsewhere to do their binary options trading.
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References and Further Reading:
1. Do domestic investors have an edge? The trading experience of foreign investors in Korea (H Choe, BC Kho, RM Stulz – 2005)
2. Managers, investors, and crises: mutual fund strategies in emerging markets (G Kaminsky, RK Lyons, SL Schmukler – 2004)
3. Trade, quality upgrading and wage inequality in the Mexican manufacturing sector (EA Verhoogen – Vol, 2007)
4. From world banker to world venture capitalist: US external adjustment and the exorbitant privilege (PO Gourinchas, H Rey – 2007)
5. Costs and benefits of a common currency for the ASEAN (S Madhur – 2004)
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