Binary options trading originated in the US; however, it has since become a large part of the UK finance markets. It is a viable alternative to the traditional stock market investing and a legitimate option in the UK. Many people consider it a form of betting. Although you can take a gambling approach to this type of trading, you can also adopt a binary options strategy, study the markets and generate a consistent income through hard work and market research.
There are many UK based binary options brokers. Part of the reason for this is that the UK was one of the first places in Europe to include binary options as a form of financial instrument. This has given many binary brokers plenty of time to become regulated and compliant. The UK was quick to accept this type of trade as they already dealt with Forex trading and noted the similarities.
There are two ways in which a firm can become a UK binary options broker. The first is to register in any European country. Under the EU guidelines such firms can then offer their services in any European country. It is worth noting that this option may not be possible after the UK has left the EU. The alternative is to register in the UK and obtain a UK license to trade.
A broker which registers in another European country will need to apply with the same financial laws which are currently in force in the UK; this is because all countries in the EU abide by the same trading and financial rules. Anything which applies in one country must be applicable to the rest of Europe. This can make it difficult for individual countries to create their own laws.
It is, therefore legal to use a UK registered binary options broker or one from any other country in Europe. However, this does not mean it is safe or desirable to do so! It is possible for a firm to be registered in Europe but not to be regulated. If they do not have a license then there is no control on their trading procedures and you could be placing yourself and your capital at risk.
The UK Financial Service Authority, or UK FSA used to monitor and regulate binary brokers. This has now been replaced with the FCA and the FPC. The first of these creates the rules and regulations that all firms must abide by. The second body supervises the firms. This ensures a good level of regulation and safety for traders. A broker regulated in the UK is unlikely to be attempting to scam you and should be considered safe to use.