Binary Trading Essentials 4

Question 1

Which U.S. agency regulates legitimate exchange-traded binary options?

Accepted Answer

The CFTC

Answer

The CFTC oversees designated contract markets that legally offer binary options in the U.S.

Question 2

A common warning sign of a fraudulent binary options broker is what?

Accepted Answer

Refusing or delaying client withdrawals

Answer

Blocking or stalling withdrawals is a frequent red flag of unregulated, fraudulent binary brokers.

Question 3

What is a legitimate U.S. exchange where binary options can be traded?

Accepted Answer

Nadex

Answer

Nadex is a CFTC-regulated exchange offering binary options to U.S. traders.

Question 4

Why do many off-exchange binary platforms operate offshore?

Accepted Answer

To avoid U.S. registration and regulation

Answer

Many operate offshore specifically to evade U.S. registration requirements and oversight.

Question 5

What should a trader verify before depositing with a binary options broker?

Accepted Answer

That it is registered with the appropriate regulator

Answer

Confirming regulatory registration is the most important step before funding any account.

Binary Trading Practice Test