Canadians wishing to get involved in binary options are wondering if it’s legal to trade binary options in Canada and whether legal brokers operate within the country. This subject matter is rather confusing because there are multiple and often conflicting sets of rules. Deducting whether binary options are legal in Canada can be hard when looking at the existing rules.
The rules are confusing because they don’t stop Canadian binary options traders to use the services of brokers from other countries. And, despite the fact that there is not a single direct reference to binary options being illegal in the Canadian law, the authorities note that Canada does not have licensed and regulate binary options brokers.
Couple of years ago, Canadian traders had lots of options for binary options brokers located offshore. Brokers from fairly reputable jurisdictions like Japan or Cyprus have always welcomed Canadians. Canadian traders also turn to brokers that are licensed in not so reputable licensing jurisdictions like St. Vincent & Grenadines, British Virgin Islands and Belize. All in all, Canadians have very legitimate and good options where to trade.
- Important Information For Canadian Traders
- Frequently Asked Questions
- Are Binary Options Legal in Canada?
- Can the government go after Canadian binary options traders?
- Does legal means regulated?
- Do Canadians have to be concerned about singing up with an offshore broker?
- Can I find a list of reputable brokers?
- Can a broker acquire a license in Canada?
- Can I seek help from the Canadian financial governing bodies?
- What is the national financial authority?
- What assets should Canadians trade?
- Are there any hints that Canadian authorities will regulate the binary options market in Canada?
- The Aspects on Which You Should Base Your Broker Selection
- How To Start Trading
The Canadian market is ever-expanding and as the people develop interest into binary options trading, investors raise the question about the legality of binary options and whether it’s going to be regulated within the country. Although Canada has many financial authority bodies, none of them mentions binary options specifically on national or provincial level. At the moment, it seems that no information exists when it comes to binary options. This does make the traders weary, but the majority of them are confident that no persecution will follow if they go online and look for offshore brokers to trade binary options.
Since there is no law about it, the government has no basis to persecute traders. When there is no law, it means it’s legal and therefore binary options investors can freely register with an online broker and start trading. Since there are no provincial differences about this because none of the provinces has legislation about binary options, traders from all over the country can legally and freely trade.
No, if something is legal it doesn’t mean that it’s regulated. This is why its recommended to exercise a high degree of caution when deciding on a broker. A broker can be legal, but if there are no guidelines in the industry that means all kinds of brokers can attract traders in Canada. To avoid being caught in a scam, Canadian traders are strongly advised to perform thorough check on a broker before conducting business with the broker.
Despite the fact that there are many fraudulent brokers out there, it doesn’t mean that all are scam. The lack of regulation means that Canadians have access to brokers from all over the world, which means to brokers located in highly reputable jurisdictions like United States, United Kingdom or the EU in general.
Since there is no regulation, Canada’s financial authorities have not bothered to make up a list of reputable brokers like in other countries. Therefore, the responsibility of finding a legitimate broker falls on the shoulders of the traders themselves. But, if you take your time to do a research, you will easily come up with the best brokers available to you. Start with our site and the brokers found there and make your way towards other.
No licensing process is in place in Canada. This leaves lots of room for foreign brokers to compete for the Canadian trader. However, these foreign brokers may hold a license and every Canadian trader should always invest his hard-earned dollars only at licensed brokers. Also, there have been cases where brokers have declared to be Canadian brokers licensed in Canada just to attract Canadians, which is most likely a lie because the Canadian financial authorities don’t issue binary options licenses.
Although they don’t regulate the binary options market, they are always willing to give assistance to Canadian traders relating to investments. All provincial authorities (or the national one) can be contacted if questions arise.
If there was a licensing process in place, the financial authorities that would have overseen the issuing of licenses and regulation of the market would be the Canadian Securities Administrators (CSA). It’s where you can direct all of your concerns regarding binary options at the moment on a national level. The CSA’s mission is to lower systemic risk within capital markets, ensure fair and transparent financial processes and protect the consumers.
It is generally recommended for binary options traders to trade assets relevant to their country of residence. However, it’s difficult for Canadians to follow this because very little foreign brokers are interested in assets like Canadian commodities, indices, stocks or currency. They are not deemed as the best for making profit. So, a Canadian trader may choose to trade assets more relevant to the United States because they have much volume and liquidity.
It’s unclear at the moment when or if the financial authorities will show interest in regulating binary options in Canada. The only interest shown at the moment is the interest of the CSA to keep an eye on possible fraudulent brokers that want to hurt scam Canadians out of their money. Maybe this and if more Canadians get involved into binary options will cause for the authorities to make the first steps towards regulation.
There are many pros and cons to look for in a broker, but five aspects are the key aspects you should consider when two brokers are tied for your money. In case you can’t decide between two good brokers, look for the following.
Deposits and Withdrawals
You are getting involved in binary options to make a profit, right? Therefore, it is important to look for a broker that has minimal or no fees regarding transactions. Also, it’s recommended to go for the broker that offers transactions in Canadian dollars so that you don’t have to lose money on the currency exchange.
Types of Options
The average binary options trader is interested in a couple of options even though the broker offers dozens of trading options. In general, if you want to grow your profits look no further than brokers that offer options like Doubling Up, Rollover, Boundary, No Touch, One Touch, High/Low etc.
A user-friendly platform as well as the option to use a demo account first is important too. Demo accounts help traders to get a good sense of the platform and the entire service. It’s like a test run before deciding to deposit real money and start trading. Go for the brokers that offer demo accounts, test their platform and then decide.
Tools and Resources
The more you learn, the better trader you are. Although you can find resources all over the internet, a broker that has a rich library of learning resources is a recommended. Having all the important information on one place can facilitate your learning process.
Prompt 24/7 customer service response is important when dealing with an offshore broker. Brokers usually offer live chat or telephone service to address problems quickly. Also, a broker needs to have a reputable and professional customer support team, which can be easily ascertained by looking for other trader’s opinions.
Start with a small capital first because binary options don’t require much to get started. That is one of the beauties of binary options trading. A you learn and you improve your trading skills, you will want to risk higher amounts of money, which is a very natural temptation in a trader. If your budget allows it, do it. But, remember that this means increased potential for loss. The best practice here is to always evaluate how much you can afford to lose.
When you have decided how much money you can set aside to get started, decide whether you are going to accept a bonus. Brokers love to give bonuses to traders, and usually these are very helpful as a budget boost. But, some bonuses have been created as drawbacks. The drawback is usually spotted when you want to withdraw your profits only to see that you haven’t met the terms & conditions set out for the bonus. Such bonuses are not worthwhile at all.