Top Rated Options Sites - Is Pocket Option illegal in US?
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
Top Rated Options Sites
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.
Options Sites in The USA
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 TaxUSA 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 casinos, they dont 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 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.
For US traders it can be a lengthy process finding an appropriate broker use. The legislation and regulations mean that you cant 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.
How we Recommend Brokers
We understand that you dont 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 wont 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 doesnt matter what country were 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.
Is binary trading in the USA legal and safe?
Frequently Asked Questions
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 doesnt provide an excellent mobile service, then we say avoid them.