Is binary options trading legal in the uk

In a nutshell, binary options trading is banned in the UK. A more nuanced answer would be that binary options trading is legal for professional traders but not for retail clients. Most people who read this are retail traders, and if you do not know if you are a retail client, you are almost guaranteed to be a retail trader.

Let’s delve a bit deeper into the specifics of binary options trading in the UK.

Regulated by the Financial Conduct Authority

Sponsored Brokers With Binary Options Trading

The Financial Conduct Authority (FCA) regulates the financial industry in the United Kingdom, including binary options trading. Any entity offering financial services or products in the UK must be licensed and regulated by the FCA, including brokers who offer binary options trading platforms. However, The FCA does not allow binary options traders, which means that no FCA-regulated trader can offer binary options.  No broker that is legally operating in the UK can offer binary options.

There are several offshore brokers that, despite this, offer binary options trading to UK traders. These are operating illegally in the UK.  It is, however, 100% legal for you to trade with them.  They will be breaking the law by allowing you to trade, you are not breaking the law.  With this said, using an offshore broker offers you very little protection in case of a dispute with the broker.

FCA and Binary Options Trading

Initially, binary options were regulated by the UK’s Gambling Commission. However, since January 2018, the oversight of binary options trading has been transferred to the FCA. This move was a clear signal by the UK authorities of their intention to make the binary options industry more transparent and safer for consumers. However, the FCA and European counterparts decided that binary options trading was too high risk and decided to ban it.  The FCA Banned binary options trading in April 2019.

Since then, All firms acting in or from the UK are permanently prohibited from selling, marketing or distributing Binaries to retail consumers

Choosing a Binary Options Broker in the UK

If you’re interested in binary options trading, you will be forced to choose an offshore broker. This is not secure but it is the only option. While choosing a broker, check that they are indeed registered with a somewhat reputable regulator. Avoid completely unregulated brokers.