With the implementation of Dodd- Frank Act, many US traders are bemused as to whether or not binary option trading is legal in United States. Since this trading option involves lower levels of risks and uncertainty than other means of trading, it has become a widespread and well-accepted trading option amongst experienced traders, especially in U.S. However, US traders have got a massive hit after the enforcement of Dodd-Frank Act.
The situation has become rather unpleasant because most US traders seem to disregard the Act and the new regulations. They keep trading in binary option like before. Although many US traders are still trading using best binary options, yet they are apprehensive about this trading option’s legitimacy in the country. Here are some points that would help the traders understand the present stock market situation, in terms of implementation of Dodd-Frank Act.
- Effects of the Act – According to Dodd-Frank Act, binary trading is no more a legal trading option for the US traders. They are not allowed to trade in the stock market using this option. Binary trading option has been one of the most favorite and popular trading options, especially for the day traders who play the most important role in controlling the breath of the stock market. They keep stock market moving and control its direction. Without such traders not only does day trading get a plunge, but the whole stock market suffers a lot. Since binary trading option and the day traders have been hit the hardest by Dodd-Frank Act, the brokers deliberately have started ignoring the Act. Nevertheless, the situation may become even worse in coming days when the government will start tracking down offending brokers and holding back affiliate commissions.
- Legal trading options in America – Binary options stock indices and commodities are, however, not restricted by Dodd-Frank Act. These are kept untouched by the Act. But it covers forex trading that the US traders are not permitted to involve in. Securities which are regulated by Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) are legal in USA.
- Activities of delinquent brokers – There are a number of binary options trading brokers in United States who disobey Dodd-Frank Act and thus the law and the government. People interested in trading should avoid such brokers. They must read customer testimonials before they create a trading account with a stock broker. However, these testimonials make no sense unless they are real-time.
It is true that U.S. stock market has taken a big hit by Dodd-Frank Act. But it would be wise if the brokers follow the law and go by it. Multiple legal trading options are available for the US traders. For example, they can work in French market or Japanese market. Breaking law can’t be a solution to any problem. Nobody can be benefited by disobeying laws – neither the brokers nor the traders. In fact, it is not good for the whole system. Rather breaking law would create more problems over time and solve nothing.