As we enter 2014 we would like to review some of the top stories in the world of Binary Options over the past year.
To Be Regulated or Not to Be Regulated
2013 saw the first group of brokers receive a CySEC CIF license making them regulated throughout the EU. The licensing is actually a requirement for brokers registered in Cyprus. In late 2012 SpotOption, the largest platform provider, which is based in Cyprus, received the first Binary Options license. This year Banc de Binary, TopOption, iOption and 24option became the first brokers to get the CySEC license. The process is costly and takes several months.
Another key factor in deciding whether to secure regulation or not has to do with the acceptance of US customers. Earlier this year Banc de Binary made headlines by claiming they were in negotiations with the CFTC to become regulated in the US. In fact the CFTC and the SEC demanded that Banc de Binary cease from soliciting or accepting accounts from US citizens. The only way they could do so would be to act as an exchange following all applicable CFTC and SEC regulations which is an extremely long and expensive endeavor. CySEC is actually participating in the proceedings against Banc de Binary and it appears that part of the CySEC licensing requirements is that brokers stop doing business in the US.
Sure enough Cyprus based brokers such as 24option and AnyOption stopped accepting US accounts as they were in the process of applying for their CySEC licenses.
The question for the future is will brokers like TradeRush and Cedar Finance continue to accept US customers while flying under the radar of the CFTC or will they take the safe route and complete their CySEC licensing requirements and focus on the non US markets until a reasonable solution for US regulation is found.
Bots, Robots and AutoBots
2013 has been the year of the Bot. After the initial success of the Option Bot trading system in 2012 there have been a plethora of Bot offerings this year including Option Bot 2.0. The Bots/Trading systems use aggressive marketing campaigns directed at segments of society looking for get rich quick schemes. They often make outlandish promises that you can make hundreds of thousands of dollars with these systems that exploit opportunities in the market. These Bots have drawn many customers to brokers. Unfortunately these are people who had no inclination to trade Binary Options, but were just looking for easy ways to make money.
Many brokers work with these Bot companies as they drive many customer deposits. I anticipate we will continue to see more and more of these Bots and systems. Many of them are basically the same product just marketed in different ways and repackaged as the newest winning system on the market.
The truth is many of the bots have value. They can be an important tool for traders as they provide quality real time trading signals. As people become disgruntled with the false promises and brokers realize that more harm is being done for the long term success of the business the bots will be marketed for what they are; a helpful trading tool if used with an effective strategy.
More Brokers, New Platforms and Better Features
This year we have seen an explosion of new brokers to hit the market. There are close to 200 brokers available with little to distinguish many of them. Brokers are offering lower minimum deposits, higher payouts, free signals, tools and higher bonuses as ways to try and lure traders. From our experience the brokers that provide the best service and honest and transparent businesses modeled after the most successful brokers are the ones to watch. We have singled out Redwood Options and Bee Options as the 2 new brokers for this year that best fit these standards.
We also saw competition among the different platform providers to offer better designs and new features. TradoLogic and TechFinancials both upgraded their systems earlier this year by adding short term options and other features. Recently SpotOption unveiled their new platform with GToptions and Bee Options. The new spot design includes improved charts and 30 Second Binary Options.
As we move forward we will begin to see smaller brokers begin to close their doors while others will be consolidated with larger brokers. We should also see Forex companies begin to introduce their own Binary Options trading platforms with unique designs and features.