How to Become a Binary Options Broker - Part 3
In Part 1 and Part 2 of this article series, we talked about how to get the capitalization and clients you need to get your binary options brokerage startup off the ground. In this last part of the series, we will talk about the physical aspects of the business you need to go live.
Offshoring and Regulations for a Binary Options Broker
Get an office
You need a physical address for your binary options brokerage. This is crucial, considering the proliferation of unreliable binary options brokers that give the business a bad name. If you want to put up a legitimate business, you need a place to hang your hat to lend it the appearance of legitimacy.
That said, you probably want a fancy office with gleaming chrome seats and a full staff, but you won’t be able to afford that on $50,000 startup. If you can, then go ahead and do it!
Otherwise, there is no reason why you cannot operate out of your home or garage until the money starts coming in. Many successful tech businesses started out that way, so you should be just fine.
At this point, you should have hired and trained one or two people to help you with sales. If you are keeping it strictly barebones, it means you and maybe a family member will have to do all the legwork at the start. However, you should prepare for a time when you will have other people handling this for you so you can concentrate on the brokering side of the business.
The only sticking point with this is regulation. If you base your physical office in the US, you will probably need to register the business there. In most cases, offshoring is an option, but that will mean doing a lot of research on the best place to set your stakes down.
That can also be a bit tricky, as this will restrict your market somewhat. US clients, for instance, cannot trade commodities with you if you are not US regulated. Some clients may also feel uncomfortable trading with you if your address is in a country that does not regulate binary options brokers.
On the other hand, you probably cannot afford to secure the regulation you need to operate legally in the US, UK, or EU. In most cases, you need around $15,000 to get it, and you will need a lawyer to help you.
Securing regulation is something that you certainly should consider very seriously when you can afford it, especially if you have plans to cater traders across the borders. In the meantime, if you do not want to consider opening an offshore company, you should put off establishing a physical address for your company and operating purely online. The best thing about an online-only binary options trading business is you will not have to worry about many overhead costs.
Now that you have everything in place, it is time to launch your brokerage business. You can start marketing it on social media with promos and giveaways to attract attention to your site. It could go slow at first because you're just starting out, you might do a lot of tweaking and A/B testing before you find a formula that works for your venture.