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Law Educator, Esq.
Law Educator, Esq., Attorney
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I would like to know if, as a US citizen, I can legally trade

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I would like to know if, as a US citizen, I can legally trade binary options through an online broker who is not currently regulated with the CFTC or the NFA, otherwise is NADEX the only place I can legally trade binary options? What about using online brokers from other countries? What does the Dodd-Frank legislation have to do with all this, if anything?
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Under Frank-Dodd, US citizens are not allowed to trade in binary options anymore. Also, other related options like gold options aren’t allowed either. However, binary options commodities and stock indexes are allowed. Frank-Dodd also prohibits US residents from engaging in forex trading. US residents may engage in trading securities that are regulated by NFA (National Futures Association) and CFTC (Commodity Futures Trading Commission).

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Customer: replied 4 years ago.

Thank you for your reply, yet I am still curious. Are you saying no one can trade binary options with currencies and no one can trade forex in the US? If we are able to trade binary options with indices and commodities, what about using online binary options brokers? Is it legal to use investment brokers inside the US and outside the US? And if so, which ones are legal for US citizens to use?

Lastly, NADEX allows people to trade binary options with currencies. They are regulated by the CFTC and the NFA. Is NADEX the only place to trade binary options legally (they are exchange)?


Thanks so much!

I am saying no US resident under Frank-Dodd can legally trade in the binary market or the forex market. Frank-Dodd has severely restricted what can be traded upon. It is not legal to trade other than stated above such as binary commodities. Engaging a foreign broker (as some US citizens do) and trading outside of the US would violate Frank-Dodd and would subject the investor to penalties if caught. If you are trading securities regulated by the NFA and CFTC, then you can engage in those trades with a licensed US broker.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118773
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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