Canada holds a prominent position in the global markets, mainly due to its relationship with the US, both economically and geographically. The USA and Canada are two of the most important countries in the world for companies operating across a broad spectrum of industries, including the financial markets. The country is also known for its diversity, high income, and excellent rating in the human development index, which has helped the country to possess a healthy set of investors who have the ability to invest in different markets across the globe.
Binary options brokers have also flocked to the nation through online platforms to take advantage of the highly lucrative investors market, but the country has framed a few laws quite recently that affects traders in Canada. In this comprehensive Canada binary options brokers guide, we discuss the legality of binary options trading in Canada, and how it affects Canadian citizens.
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Binary Options Trading In Canada
Canada is not as advanced as the US, as far as regulating the binary options market is concerned, which had led to numerous scams and fraudulent malpractices. These financial irregularities have cost investors millions of dollars, which forced Canadian authorities to reconsider its approach towards binary options trading. Over the last few years, Canadian traders were able to invest in modern binary options products through offshore brokers, especially with brokers that provided services through their online platforms. These online brokerages could legally operate in Canada without any regulatory supervision, as Canada did not have any primary regulatory body for governing binary options activities.
However, Canada recently brought out several laws and restrictions on binary options trading, which limits traders from investing in any short-term binary options that have an expiry time below 30 days. Canadian authorities plan on banning all binary options brokerages in Canada that offer any exotic or high-risk products, especially those that sell binary options products with extremely small expiry times in the range of seconds, minutes, and hours.
There are also several other operational guidelines imposed on Canada Binary Options brokers, which may see the country witnessing a rapid decline in the number of brokers operating in the Canadian jurisdiction. Binary Options traders from Canada are also encouraged to exercise extreme caution while dealing with online binary options brokers, particularly those that are located in offshore tax havens. Therefore, binary trading in Canada has essentially become one of the most regulated and controlled products in the market.
Binary Options Financial Instruments In Canada
Binary options brokers normally offer a full suite of trading assets that cover the entire financial market across the globe. However, with the several restrictions in place regarding the expiry time of contracts, binary options companies may face an acute shortage of assets that provide exciting trading opportunities for its clients. Of course, a 30-days expiry time may seem to be a safe option for long-term investors, but the regular markets such as Forex, commodities and CFDs witness fluctuations in prices every second. These market fluctuations offer a better opportunity to manage risks in control capital outflow, which makes it incredibly frustrating for traders who prefer short-term trading.
The blanket ban on all binary options below the 30-days expiry may not be the best course of action for binary options trading in Canada. Even the regular FX and CFD products allow traders to trade for the short-term, but the action seems to be a genuine attempt on curbing binary options scams. Nevertheless, traders from Canada can still access a large number of instruments and continue to trade with overseas brokers, provided they comply with Canadian binary options regulations.
Canada Binary Options Trading Platforms
Canadian traders depend on binary options brokers that are established in other parts of the world, and hence, the choice of platforms vary from proprietary to third-party trading platforms. Traders from Canada may often find themselves trading with some of the more common and popular third-party interfaces such as SpotOption; thereby making it easy to switch between brokers without losing continuity. While third-party trading platforms may be beneficial from a familiarity standpoint, several proprietary trading platforms may offer unique platform advantages that can make trading truly enjoyable.
Traders are also offered an opportunity to utilise mobile trading platforms for Android and iOS devices, as most brokers have either proprietary or third-party software to facilitate mobile trading. Other brokers also offer web trading apps for its mobile users, especially after Apple’s policy changes that ban any new iOS binary options apps from being published in the App store. Regardless, traders are indeed given a chance to trade on a multitude of platforms without any limitations.
Since Canadian traders are forced into choosing overseas brokers, it may be difficult to sign up for a free demo trading account. Unlike Forex trading, it may not be possible to practice before trading, unless the broker grants a demo account under exceptional circumstances. Usually, brokers may offer a limited demo account to its users, only after depositing money into a live trading account. Nevertheless, there are a few companies that may provide a free demo account, and we have provided a list of top Canadian binary options brokers that offer the best trading platforms and a free demo account for users upon request.
Bonus On Deposits With Canadian Brokers
Traders can get plenty of bonuses from online brokerages, as there are no regulations in Canada that prevent brokers from providing bonuses to traders. In fact, there is a significant difference between Canada and other countries such as the US and several parts of the EU, where regulators have outright instructed its regulated companies to avoid indulging in any bonus-related activities. Bonuses do create a conflict of interest as they contain several bonus trading guidelines, which can create rifts between a trader and the broker.
Trading bonuses from Brokers operating for a Canadian audience may include credit balance top-ups, loyalty points, and direct bonus on deposits. The bonuses may vary according to the choice of a broker, but traders can expect to receive around 10% to 100% in bonuses on each deposit. Some brokers may even offer more trading credits and free promotions, but we do not recommend availing a more substantial bonus due to the associated terms and conditions.
Account Funding & Withdrawals
The inherent advantage of choosing to trade with an online binary options company from anywhere in the world is the option to choose a small initial investment. Typically, regulated firms from the US and the EU may require a higher starting capital, but some companies allow its traders to start trading by making a small initial deposit of just $1. Although it is advisable to invest at least $500 for trading purposes, the full range of choices does make it convenient for traders to choose a broker that suits their trading preferences.
It is also possible for traders from Canada to specify a deposit or withdrawal option from several different options, including credit/debit card, bank wire, and e-wallets such as Neteller, WebMoney, and Skrill. Brokers may also enable traders to make a payment without any transaction fees, where all funds are moved to segregated accounts in the case of regulated companies. Trusted binary options brokers will always comply with the existing regulations while handling their clients’ money, which ensures that traders can enjoy the best secure payment protocols for the safety of their investments.
Canadian Binary Options Regulation Authorities
Canada is a country that is made of 10 provinces and three territories, which has independent regulatory organisations that are responsible for regulating financial activities in their respective regions. However, the rising number of scams and frauds in the financial markets have resulted in the collaboration of these independent agencies, which has resulted in the formation of the Canadian Securities Administrators (CSA). The CSA is now a full-fledged agency that oversees and monitors the activities of financial companies by introducing new laws for the benefit of investors from all the provinces and territories of Canada.
The CSA has taken extreme measures in Binary Options regulatory policies by terming any broker dealing in short-term options as a potential scam. The CSA proactively investigates all financial transactions by blocking credit/debit card and wire transfers to brokers that do not comply with the Canadian laws.
The agency has even set up a Binary Options Task Force (BOTF) to investigate any alleged infringements, and has resolved to minimise losses to investors in the binary options market. Although CSA faces an uphill task of enforcing its policies on web-based and overseas brokers, the agency acknowledges that the process will involve a substantial amount of time. It also recommends its citizens to stay vigilant and approach the CSA website for more information before trading binary options.
Benefits Of Choosing Authorised Canada Binary Brokers
- Protection against financial scams and broker malpractices.
- Full indemnity against legal proceedings.
- Ability to receive professional and personalised customer service.
- Safety and security of funds.
- Reliable trading platform with a stable trading environment.
- Better trading services and transparency in order transactions.
Avoiding Binary Options Scams In Canada
Choosing a regulated company is the most important rule for avoiding scams in the binary options market. Canadian authorities are in the process of introducing even stricter laws to ban binary options trading altogether, which makes it absolutely vital for traders to ensure that they comply with the local rules and guidelines while investing in the financial markets. Even if there are genuinely reliable brokers operating in the industry, the CSA and other Canadian regulatory agencies may deem a company to be illegal if they do not conform to the existing regulatory framework. Therefore, make sure you visit the official CSA website and take a look at our recommend top pics for Binary Options brokers in Canada before investing.
- Is Binary Trading Legal In Canada?
Binary options trading used to be an unrestricted activity until quite recently, but Canada has imposed several changes to the market. Binary trading is still legal in Canada, but subject to some restrictions.
- Which Canadian Agency Regulates Binary Options Trading?
The Canadian Securities Administrators (CSA) is the unified agency that is responsible for regulating binary options brokers and binary options trading in Canada.
- How To Spot A Scam?
A scam broker will often try to deceive a trader into making erroneous transactions and follow unethical practices. The CSA website has a specific section to inform traders about the legal aspects of binary trading in Canada.