Best Choice! The leader in our ranking!
Perfect for beginners!
Free Demo Acc + Free Trading Education!
Good choice for experienced traders!
Top 10 US Binary Option Brokers
As of date, the US residents face the maximum trouble in finding a binary broker accepting the US clients.
The main reason for that is the US law that demands registration of a Forex or binary broker with the SEC (Securities and Exchange Commission) or the CFTC (Commodities Futures and Trading Commission), as deemed necessary, before accepting the US clients.
The CFTC is the federal agency that regulates the trading of commodities futures and options in the USA.
Only a handful of binary brokers has the financial capability to shell out $20 million as a deposit with the CFTC. Furthermore, a binary broker has to strictly comply with the following regulatory procedures.
List of Top 10 US Binary Option Sites for 2020
|Broker||Offer||Devices||Trade Now / Review|
- The binary broker should have a physical presence in the US.
- The binary broker should provide a detailed risk disclosure statement to the clients
- A binary broker should disclose the number of active trading accounts at the end of every quarter. Furthermore, the number of profitable accounts should be revealed.
- A binary broker should also maintain liquid assets equal to or more than the total amount of obligation to retail customers.
- The binary broker should also send a detailed monthly statement to all the clients on the final trading day of every month.
- Without any delay, a binary broker should disclose legal issues, if any, to the CFTC.
Thus, considering the practical difficulty in following the rules, many binary brokers turn their back to the US clients. However, there are some legitimate binary brokers, provided in the list below, who accept traders from the US.
Those brokers who are not authorized, but are believed to be soliciting the US clients are named in the CFTC Red List. The CFTC’s official website also provides the disciplinary action, if any, taken against a binary broker. The regulation watch dog will only lend a helping hand, if a trader deals with a binary broker registered with the CFTC or SEC. A binary broker’s trading platform registered as an exchange will be listed in the SEC. On the other hand, a binary broker who is registered as a designated contract maker will be in the list of CFTC regulated brokers.
The nature of digital option contracts offered by a CFTC regulated binary broker is almost the same as the one offered by a broker operating from some other part of the globe. The only CFTC regulated exchange that offers a different kind of binary options contract is the Nadex exchange.
Best Binary Options Brokers in the US
Invest With TD Ameritrade – Now Commission Free
Invest With TD Ameritrade – Now Commission Free
Open an account with Benzinga’s best online broker, TD Ameritrade. $0 commissions on online stock, ETF, and option trades plus award-winning platform and customer service.
Wall Street is often referred to as a casino, with investors placing their bets on whether a stock or index will go up or down over time. The big difference is that investors can often leave their bets on the table indefinitely, waiting out random price moves or short term market sentiments.
Best Choice! The leader in our ranking!
Perfect for beginners!
Free Demo Acc + Free Trading Education!
Good choice for experienced traders!
The fast-paced world of binary options is a different kind of casino, an all-or-none win-or-lose gamble on the price or direction of just about any security or asset. Winners can win big, possibly seeing a 70 to 80% return in a matter of minutes. However, a losing trade is a 100% loss of risk capital. The stakes are high.
Quick look – the best binary options brokers
- Nadex – Open an account
Table of contents [ Hide ]
What is a binary options broker?
Binary refers to something having two parts. In binary options, you can think of these two parts as being two sides of the trade – but you can also think of it as a yes or a no, or an up or a down or a win or a loss. There’s usually no in-between with binary options, no small gains, and no small losses.
Binary options brokers, much like other types of brokers, facilitate the trade. However, there are some distinct differences because many binary options brokers take the other side of the trade as opposed to just working as an intermediary.
Binary options brokers also differ from conventional brokers in that there is no option to buy or sell the underlying asset. A binary option on the price of gold doesn’t entitle the trader to purchase (or sell) the gold at the strike price. It’s simply a bet on whether gold will reach a certain price within a certain time frame, often with trade durations measured in minutes or even seconds. Binary options are a lightning-fast market and can be electrifying if you guess right – or just as shocking if the trade doesn’t go your way.
What to look for in a binary options broker
For U.S. traders, CTFC regulation is an important consideration. To date, only a few exchanges are authorized by the CTFC in the U.S.
Transparency is equally important. With losses frequently 100%, it’s critical to know your potential profit or loss before you make a trade. Clear terms and conditions help to aid traders in making educated trading decisions.
Active traders know that fortunes can be made or lost in the inefficient chasm of a wide spread. An active exchange helps ensure a viable market with opportunities even on small moves in price.
Established brokerages or exchanges
Binary options trading is one area where new brokerages or exchanges should be time-tested before investing your money. Many brokerages have come and gone, or changed names overnight, feeding a healthy skepticism for binary options traders.
Red flags for binary options brokers
In many ways, binary options are the wild west of online trading, complete with the online equivalent of stagecoach bandits and fly-by-night snake oil salesmen. Brokerage contracts or terms and conditions may include limitations on withdrawals that can effectively trap trader funds and, in some cases, attempts to withdraw money may be refused. Before you move forward, check out the CFTC’s video below.
If a broker you were considering has recently changed names, investigate further. Well-established brokers or exchanges don’t often abandon their branding readily.
Discussion board spam and exaggerated profits
Some binary options brokers have aggressive affiliate programs that pay people to get new customers for the platform. If it seems to good to be true, it might not be true.
Where there’s smoke, there’s often fire. Customer reviews skewed toward negative user experiences provide enough reason to steer clear.
Traders should be wary of brokerages that contact them to upsell or solicit a larger deposit. Often this upsell is accompanied “insider information” or by an offer of “bonus money”, free money that will be deposited into your account.
This money often has strings attached, such as a requirement that you trade X amount of your own money before the bonus money is released for trading. Less-reputable binary options brokers know they will get this bonus money back as well as the money you deposited, so there is no risk to them in offering “free” money.
Brokers that take the other side of the trade
Average potential gains from binary options trades with many online brokers is between 70 and 80%. Potential losses, of course, are 100%.
Mathematically speaking, if you aren’t coming out on the winning side on a strong majority of your trades, the house will slowly take all your money. Sometimes, this process is much faster, like when you make large bets or bet everything you have in your account. Brokers who are trading against you should be a red flag for traders and could signal odds that heavily favor the house.
Methodology: How we chose
Finding the best binary options brokers for U.S. traders can be confusing for traders because there’s only a handful of exchanges regulated by the U.S. Commodities Futures Trading Commission (CTFC). Other brokers may accept trades from the U.S. but might stop suddenly. Others block U.S. traffic from their websites. The CTFC considers unregulated binary options trading to be illegal.
The CTFC-regulated brokers are better described as exchanges. The only other parties to a trade are other traders. For the purposes of choosing the best binary options brokers, it’s better to think of brokers as platforms where you can execute your trades. All the brokers or exchanges we considered offer that core functionality, but they may use different mechanisms to provide a market and only a few are CTFC-regulated.
With many binary options brokers that are not regulated by the CTFC, the broker takes the other side of the trade. This can create a conflict of interest because the broker controls the rules and mechanics of the trading platform but also has a stake in the outcome of the trade.
It isn’t uncommon for some less-reputable brokers to extend the expiration until the trade swings back to their favor or to implement some other digital chicanery to separate binary options traders from their money. Traders in these situations are often effectively powerless, many with no viable recourse other than to stop using the platform.
In an online search for binary options brokers, you’ll find that most do not accept U.S. clients, including many that are regulated by other jurisdictions, such as the UK’s FCA or Australia’s ASIC. Options are sparse for U.S. binary options traders.
Best binary options brokers
We chose to limit binary options brokers in our lineup because very few are CTFC regulated in an industry that has had its share of unpleasant user experiences ranging from unclear terms and conditions to unresponsive brokers when traders tried to withdraw funds.
American Traders Guide
The USA is a tricky place to trade binary options from. With regulations and laws continually changing, you may be asking yourself if the information you have is correct and up to date. Firstly, it is “not” illegal to use binary options in the US. However, you may find it more of a challenge compared to other countries.
That said binary options trading is not as regulated as compared to Forex or other trading types so the restrictions are not as tight as they could be. It is essential though to make sure you trade with a reputable, regulated broker whether USA based or as long as they legally accept US traders.
With the recent spotlight on online trading, many US traders now find themselves without a reliable broker. Who can you open an account with and are there are any regulations that you should be aware of? Well, we are here to answer those questions and provide you with advice through our carefully curated list of brokers.
In this article, you will learn:
The brokers best suited to your needs What local payment methods are accepted Taxes and fees that apply to US residents
Traders in The USA
While binary trading in the US is legal, the Commodity Futures Trading Commission (CFTC) classed options trading as akin to gambling and put in place sanctions and legislation similar to those that govern casinos. These rules prevent many international firms from advertising their services and soliciting US traders which then leads them to stop accepting new signups. The limited choice of international brokers available means traders sometimes choose a locally based broker.
While it is difficult to find an international broker that accepts US traders, there are still some good ones to choose. With increased regulations, many brokerages have now decided to move their head offices to locations like London and Cyprus making it hard to find a good USA broker. So, in such a heavily regulated binary options market, what should you be looking for and how do you know which broker to choose? We take a look at some of the things you should be looking out for:
Licensing And Regulation
When something is as heavily restricted as binary options trading is in the US, there will be companies that try and trade under the radar! Exercise caution and make sure you choose a broker with reputable licensing and regulation.
Asset And Trade Types
With a restriction on brokers that you can choose from, you want to make sure that you pick one that offers everything you want. Make sure they provide the range of assets that you are looking for and a variety of trade types.
Mobile Trading Features
Trading on the go has become critical to many of you. Who has the time to be stuck behind a computer in this era of modern technology? Check that the broker offers a mobile app or at least a responsive website trading platform.
Free Demo account
Check out the various demo accounts and the restrictions that apply to use them. Can you use it without making a minimum deposit and is it reloadable? Are you able to carry on using it to complement and enhance your trading skills?
Given the unknown quantity of external brokers and the restrictions of those available to them many people, when faced with a choice, will choose a local broker sadly missing out on some of the great offers available from international sites. Following our recommendations and reviews will ensure that you get a good trading experience whoever you choose to use.
Broker Fees And Tax
USA law states any profits earned from binary options trading are subject to US tax. You must report the income as either capital gains or revenue to the IRS. If you are making a small amount, then the money can be declared as income; however, if it is a significant amount, then it must be reported as capital gains tax.
Of course, your profits can be offset by any losses so you must declare the overall income earned taking into account money lost. As brokers don’t fall under the same category as casino’s, they don’t have to send you a tax form, so it is the responsibility of the trader to ensure they declare the revenue in the appropriate tax year.
Aside from taxes, there are a few other small fees to consider:
Deductions for the commission of successful trades which happens at source Broker fees for processing deposits and withdrawals using specific payment methods e-Banking platforms tend to charge a small commission for each deposit, and certain types of wire transfers will have costs associated with them Currency conversion fees if trading in a different currency
While these fees aren’t huge, it is worth shopping around for the best payment providers and option brokers that don’t charge fees for deposits and withdrawals. Consider making fewer but larger deposits or withdrawals to minimise the set fees.
While some questions surround binary option regulation and the legalities of trading we are here to remove any areas of uncertainty and provide you with fact-based knowledge. It is perfectly legal to trade binary options in the USA, and for traders to register with any broker, but it is illegal for offshore companies to solicit traders unless they have a Commodity Futures Trading Commission (CFTC) license.
Because of this difficulty of entering the USA market and the red tape surrounding it, many international brokers do not accept US traders with many leaving for countries like England and Cyprus.
Some big-name brokers are widely known and accepted and can save the trader from having to go looking for an appropriate offshore broker. There are also plenty of Commodity Futures Trading Commission (CFTC) licensed companies that are allowed to sign-up traders from the USA and are not deterred by the legislation.
Without spending time and effort in researching these companies, many people tend to stick with what they know. We, however, think that the choice should be there for you to make and so we use our expertise and experience to research the market and bring you the best binary options brokers that are licensed to trade in the US.
Exercise caution and make sure you choose a broker with reputable licensing and regulation.
How we Recommend Brokers
For US traders it can be a lengthy process finding an appropriate broker use. The legislation and regulations mean that you can’t just find one that you like the look of to open an account. Not only should you be comparing their offering to that of their competition but you need to check that all binary option brokers are licensed to trade in the USA.
We understand that you don’t have unlimited time to go through a long list of brokers to find the one that offers the best benefits to you then to see that they won’t accept your business. To help you and save you much time we have put together a list of recommendations to ensure that you find the best trading account for you without having to spend hours finding it.
It doesn’t matter what country we’re reviewing when it comes to binary trading; the USA gets the same treatment. Our recommendations and reviews cover many crucial points. These include the benefits such as great bonuses, the quality of the signals service, the usability and functionality of the trading platforms and the payouts on offer. We have a team of experts whose purpose is to investigate the offerings of all brokers to find the best US binary options broker and recommend them to you.
Frequently Asked Questions
Is binary trading in the USA legal and safe?
It is legal to trade a binary option, but it is illegal for any company to solicit business and trade unless they have a local license. In terms of safety, it is perfectly safe to trade with a reputable broker.
Do I need to pay fees and taxes on my profits?
The IRS requires all residents to declare their income and pay any taxes according to federal law. It is not the responsibility of the brokers to keep a record of traders’ deposits and withdrawals.
Can I test brokers before trading with real money?
A demo account is a crucial feature of any reliable and reputable broker. With a demo account, a new account holder can register and take advantage of this demo feature before they have to use their own money.
Is it easy to make deposits and withdrawals?
As long as you have a way to an initial deposit using a widely accepted debit card, then you can pay quickly. Withdrawals can take between 3-5 days, but some sites offer a quicker turnaround.
Can I trade using my mobile or tablet device?
Many good US brokers offer a reliable mobile site and an app for iOS and Android. If the broker that you are looking at doesn’t provide an excellent mobile service, then we say avoid them.
Jacob has been an author for us since our launch in 2020. He has over forty years’ experience in the financial sector and has held a variety of positions within financial services corporations and venture capitalist organisations.
Top 10 US Binary Options Brokers by TradersAsset
The legal landscape for Binary Options trading in America is somewhat confusing. There are two bodies that license and regulate online financial trading in the USA. These are the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). Neither of these has shown an interest in licensing the majority of online brokers or putting together a regulatory framework that will allow them to trade in the US. There are however, some regulated and many offshore Binary Options trading sites that will accept you as a customer if you reside in the US.
We suggest that US traders investigate each broker that you are considering signing up with, as not all will operate to the highest standards. With that in mind however, below is a list of approved and tested Binary Options brokers that will accept US traders.
Top 10 US Binary Options Brokers
We can confidently recommend these brokers as they offer their customers a safe and secure trading environment and each operates to the very highest of standards.
Requirements of a US Friendly Binary Options Trading Site
US Binary Options traders should ensure that any US-friendly broker they use meets a certain number of criteria. We have compiled an overview of the items worth checking for your convenience below.
Best US Binary Options Brokers – Updated August 2020
The trading of binary options has gained popularity across the globe, including in the US Importantly, before venturing into binary options trading, you should assess the regulatory environment in which your preferred broker operates. In the USA, where regulations and laws are sometimes restrictive, binary options trading is legal and anyone is allowed to participate.
Presently, there is no express regulation, both at the federal and state levels, which prohibit US citizens from participating in binary options trading. The United States Commodity Futures Trading Commission (CFTC) and the United States Securities Exchange Commission (SEC) regulate and supervise all activities taking place in the country’s financial markets.
Therefore, brokers offering trading services within the USA are required to be duly licensed by CFTC before being allowed to solicit US traders to register and trade binary options. The law mandates regulated binary options brokers USA to respect traders’ interests and security of funds. If a broker fails to oblige with the strict stipulations imposed by these agencies, then it will lose its license and risk other severe penalties.
Types of binary options brokers in the USA
There are two main types of binary options brokers in the US. The first category comprises of brokers established offshore and are allowed to operate in the USA market. This means that these brokerage companies are safe for US traders, as well. Such brokers are most commonly licensed in Europe and fall under the regulation of their country of origin.
The second category of binary options brokers in USA consists of those registered in the US. Before being licensed in the U.S.A., these brokers must demonstrate strict adherence to the stipulated laws and practices. As such, this will guarantee their commitment to providing traders with excellent and fair conditions for trading.
Recommended brokers for US traders
Binary options trading in USA has become quite popular and is gaining momentum with every passing day. However, a key drawback is that traders have a limited choice of regulated binary options brokers USA. for trading, mainly because of the restrictive oversight environment. Authorities in the US are very careful in the type of brokers allowed to operate in the country and are offering licenses only to a limited number.
Another reason of being so selective is the fact that the current binary options laws in the US are not yet well established. Nonetheless, it is expected that in the near future, the US would implement a new set of laws and regulations to enable the CFTC to award more licenses to both domestic and offshore companies.
Instaforex, headquartered in the United Kingdom, is a reputed binary options and forex broker allowed to operate in the USA and regulated by CFTC.
The broker has a strong team of experienced and dedicated professionals who are well known for providing traders with a fulfilling and hassle-free trading experience.
If you prefer automated trading software, then OptionRobot could be your solution for making your pursuits great and thrilling again. This binary options robot software accepts citizens from the USA, and automatically will choose US regulated broker for you to start trading.
Tips for Choosing US Binary Options Brokers
If you want to invest in the binary options market in the USA, you will need to find a suitable and genuine broker. While choosing a broker, you should consider various factors so that you are assured of the security of your hard-earned cash as well as quality trading conditions.
Here are some essential tips for choosing best binary options brokers USA.
If a broker is allowed to operate in the US, you are sure that it provides superlative and unmatched conditions for trading. If you are looking for the best binary options broker in USA., you should consider opening an account with one of the brokers above.
Best Binary Options Brokers: 2020 Ranking